Articles Posted in Trade Secrets

In a complicated trade secret misappropriation case involving an evolving cast of characters, United States First Circuit Court of Appeals affirmed the dismissal of trade secret misappropriation claims between former drug development partners. However, the First Circuit found that the district court abused its discretion by denying the plaintiff’s motion to file an amended complaint and consequently vacated the dismissal of trade secret claims against one of the defendant’s U.S. affiliate. In doing so, the Court was forced to explore the often misunderstood “narrow exception” to Rule 54(b)’s finality rule.

The plaintiff, Amyndas, is a Greek biotechnology firm that researches and develops therapeutics targeting a part of the immune system known as the complement system. In 2015, Amyndas entered into a confidential disclosure agreement (CDA) with a Danish biotech firm, Zealand, to develop treatments targeting this complement system. The following year, the parties entered into a second CDA. products as those pursued during its collaboration with Zealand. As part of its collaboration with Amyndas, Alexion requested and received certain confidential information about Amyndas’s complementary therapeutic research, including details about Amyndas’s intellectual property, planned clinical trials, platform and collaboration network.

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You may or may not have heard of Shein, the fast-fashion company out of China providing its customers with the highest fashions for the lowest prices, but if you haven’t heard of it yet, chances are good you’ll be hearing about it very soon. While Shein might not exactly be a household name (yet), it’s very quickly working its way up the ladder, having just replaced Amazon as the most downloaded shopping app.

The fast-growing fashion company has no intention of slowing its growth any time soon, and going up against Amazon is one of its key strategies. While many manufacturers consider partnering with Amazon essential to getting their products in front of customers, Shein sees greater value in having a more direct relationship with their consumers, and as a result, having direct access to their customers’ data. Access to (and proper use of) that data, combined with their ability to produce cheap versions of clothes and accessories from designer brands in a matter of days, has been critical to the fashion start-up’s success.

Shein’s ability to cheaply reproduce top fashions is not new, but the speed with which it is able to do so certainly is. While other companies providing high fashion at affordable prices, such as Forever 21, have long been accused of stealing designs and infringing on the patents and copyrights of other designers, Shein is the first company with the ability to reproduce patterns and designs from the runway (and even the social media accounts of certain designers and influencers) in a matter of days. They credit their data analysis with their ability to reproduce top fashions for a fraction of the price in a matter of days. Continue reading ›

A recent decision in the case of Huffman v. Activision, a case we previously covered here, has created a split among federal courts on the issue of who gets to decide the issue of disgorgement of profits in copyright infringement cases. The court in Huffman ruled that a jury is entitled to decide the issue. Other courts to recently consider the issue have come to the opposite conclusion finding that the court should decide the issue, not a jury. These differing answers to the same question may be teeing up the issue for the Supreme Court to settle the question once and for all.

As we have previously detailed, Huffman involves claims by retired professional Booker T that video game developer, Activision, infringed on his copyrights. Specifically, Huffman has alleged that Activision’s video game character, David “Prophet” Wilkes, in Call of Duty: Black Ops 4 infringed his own “G.I. Bro” character. Huffman requested that the issue of disgorgement of Activision’s profits be decided by a jury. Activision moved to strike Huffman’s jury demand.

In its motion, Activision argued that Section 504(b), the section of the Copyright Act dealing with disgorgement of an infringer’s profits, does not provide a statutory or constitutional right to a jury trial. Activision’s motion was filed on the heels of a decision on essentially the same issue in the case Navarro v. Procter & Gamble in which the court in that case found no right to a jury on the issue of disgorgement of an infringer’s profits under Section 504(b). Despite concerning the same issue, the district court disagreed with the reasoning and conclusion of the Navarro court and denied Activision’s motion.

The plaintiff in Navarro is Anette Navarro, a world-renowned photographer, from Cincinnati, Ohio. She filed a copyright infringement suit against Procter & Gamble (P&G) and Walmart alleging that the companies willfully infringed on her copyrights in certain photos that she provided to P&G for use pursuant to licensing arrangements between the parties. Navarro claims that P&G violated the terms of the license by using them on products and in geographic areas beyond those permitted in the license agreements and also continued to use her photographs after the licenses expired.

She sought both actual damages and disgorgement of the defendants’ profits under Section 504(b) of the Copyright Act. P&G and Walmart sought to strike her jury demand with regard to disgorgement of profits, arguing that nowhere does Section 504(b) mention juries. They also argued that there was no constitutional right to a jury under the Seventh Amendment because it only provides a right to a jury for “legal” remedies, not “equitable” remedies which the companies argued disgorgement was. Continue reading ›

Statutory fee-shifting is usually meant to incentivize plaintiffs to bring claims involving important rights but relatively low monetary damages. Some statutes provide for fee-shifting not only to successful plaintiffs but also to successful defendants. As the recent decision in the case of Multimedia Sales & Marketing, Inc. v. Marzullo illustrates, plaintiffs considering bringing trade secret misappropriation claims in Illinois courts would be wise to review their claims before filing so to ensure that their claims are not meritless.

The plaintiff in the lawsuit, Multimedia Sales & Marketing, Inc., is a radio advertiser who sued a competitor, Radio Advertising, Inc., along with three former employees who left Multimedia to work for Radio Advertising. Multimedia alleged that the former employees misappropriated Multimedia’s potential customer lead lists or renewal lead lists, which these individuals allegedly used to attempt to woo away Multimedia’s existing and potential customers. Multimedia claimed the lists were protectable trade secrets under the Illinois Trade Secrets Act (ITSA), 765 ILCS 1065/1 et seq.

The trial court disagreed and granted the defendants summary judgment finding that the lists (1) did not qualify as a trade secret under ITSA, and (2) were not “secret” because Multimedia widely shared them with numerous parties including radio stations. Following the grant of summary judgment, the defendants filed a motion for attorney’s fees as permitted by Section 5 of the ITSA. The trial court granted the defendants’ motion and awarded them $71,688 in attorney’s fees. Multimedia then appealed the ruling that the lists did not qualify as trade secrets as well as the award of attorney’s fees. Continue reading ›