Trade Secrets

Idea Theft Case Allowed Proceed

August 17, 2017 | Peter S. Lubin and Patrick Austermuehle

In a case of “idea theft,” film industry defendants who argued the right to free speech protected them against a claim of stealing a screenplay that was later made into “The Purge” films were recently slapped down by the Ninth Circuit Court of Appeals (Jordan-Benel v. Universal City Studios Inc., et al., No. 15-56045 (9^th Cir., 2017).

In 2011, screenwriter Douglas J. penned a screenplay entitled “Settler’s Day,” depicting a futuristic landscape of lawlessness and chaos, which he registered with the U.S. Copyright Office. Douglas’s agent submitted the screenplay to persons at United Talent Agency (UTA). After saying it would pass on the screenplay, UTA forwarded it to other clients of UTA, who allegedly adapted it into “The Purge.” The film and its sequel were released in 2013 and 2014, produced by Universal City Studios and four other production companies.

In 2015, Douglas filed a complaint for copyright infringement against UTA and the production company defendants, claiming breach of an implied-in-fact contract based on defendants’ implied agreement to compensate and credit him as a writer/creator should his idea be used. He alleged that defendants breached this agreement by using and profiting from his ideas without compensation or credit, seeking declaratory relief. Continue reading ›

Whistle Blowers Immune From New Federal Trade Secret Law Claims — Chicago and Naperville Trade Secret Attorneys

August 5, 2017 | Peter S. Lubin and Patrick Austermuehle

Since 1975, the ratio of intangible assets (ideas, copyright, intellectual property, etc.) to tangible assets (physical property) in the S&P 500 market value has increased dramatically. In 1975, intangible assets made up just 17% of the market value and have done nothing but increase, reaching 87% in 2015.

As of May 22, 2016, a new federal trade secrets law known as the Defend Trade Secrets Act (DTSA) went into effect and Illinois employers need to be prepared.

Although it’s a federal law that places higher restrictions on protecting intellectual property, it does not block state or local laws, such as the Illinois Trade Secrets Act (ITSA). That means an Illinois employer can file a federal DTSA lawsuit and a simultaneous ITSA lawsuit, which means, even if the federal lawsuit doesn’t go their way, they may still be able to collect damages and/or awards under the ITSA.

Alternatively, businesses can sue under the ITSA if the statue of limitations under the DTSA has expired. Under the DTSA, a lawsuit must be filed within three years of the discovery of the transgression, but the ITSA allows up to five years. Continue reading ›

Trader Jailed for Allegedly Stealing Trade Secrets — Chicago Trade Secret Lawyers Near Naperville

June 19, 2017 | Peter S. Lubin and Patrick Austermuehle

With the economy still unsteady after the recession, more and more people are attracted to the idea of starting their own business. But one of the biggest challenges when doing that is making sure you have something unique to offer the market.

For people who have spent most of their career working at one company, that’s often all they know. If they’re going to try to branch off on their own, they’d better make sure their new operation is significantly different from their employer’s, or at least has a new approach to the industry. Either way, it’s important to note that just copying and pasting your employer’s business is not only unethical – it’s illegal.

According to officials, David Newman, a 34-year-old trader who worked in Chicago, stole more than 400,000 electronic files from his employer. Those files contained all of WH Trading LLC’s proprietary computer code and trading software. Continue reading ›

Waymo Seeks Injunction for Alleged Trade Secret Theft of Google Self-Driving Secrets

June 8, 2017 | Peter S. Lubin and Patrick Austermuehle

In Silicon Valley, the heart of the technology industry, a company’s greatest asset is its talent. Their brains and the information they have access to are priceless, which is why, for many tech companies, it is imperative for them not to allow their employees to take such invaluable information directly to a competitor. It’s also why Waymo, Google’s self-driving car company, is suing Uber and one of Google’s former employees for allegedly stealing trade secrets.

According to Waymo, Anthony Levandowski, who was working on Google’s self-driving vehicle technology, left the company last year after allegedly stealing 14,000 documents containing trade secrets. Levandowski then started his own self-driving truck company, called Otto, which he sold to Uber earlier this year. Levandowski is now working as the head of Uber’s self-driving department, although Uber and Levandowski claim their technology bears no resemblance to Waymo’s self-driving technology. Continue reading ›

Google Sues Uber and Otto For Alleged Trade Secret Theft — Our Chicago Non-Compete Agreement and Trade Secret Lawyers Have Extensive Experience Litigating These Types of Cases

April 25, 2017 | Peter S. Lubin and Patrick Austermuehle

There’s no doubt that self-driving cars will be the next big thing in the automobile industry, which is why Google got so upset when a former employee allegedly took trade secrets regarding their self-driving technology to a competitor.

Anthony Levandowski claims he has been working on technology for driverless automobiles since he was in college. He entered a self-driving motorcycle into the Pentagon’s first competition for driverless vehicles in 2004, when he was still a graduate student at the University of California in Berkeley.

In 2007, Levandowski started working for Google on their maps program. When Google gave the go-ahead to start experimenting with self-driving automobiles, Levandowski was one of the first people chosen for the team.

Levandowski left Google early in 2016 to start his own business, a driverless truck company named Otto. That company was bought by Uber, at which point Levandowski became the vice president in charge of Uber’s driverless vehicle project. Continue reading ›

New Federal Trade Secret Law Protects Businesses

July 25, 2016 | Peter S. Lubin and Patrick Austermuehle

Before now, if an organization had its trade secrets stolen, its only recourse was usually to bring an action against the perpetrator in state court under the Uniform Trade Secrets Act, which was adopted by most states to provide a uniform civil remedy for trade secret theft, or under state criminal laws. The only federal protection for trade secrets was criminal sanction under the Economic Espionage Act of 1996. That changed this May, when President Obama signed into law the Defend Trade Secrets Act, which gives owners of trade secrets a new federal civil cause of action for misappropriation of their proprietary information. The law is intended to provide an alternative to the current patchwork of state laws governing the issue, but not replace them; unlike the federal Copyright Act, for instance, DTSA does not pre-empt state law.

DTSA allows a plaintiff to seek relief in federal court for misappropriation of trade secrets “by improper means” related to a product or service in interstate or foreign commerce. Improper means is defined as theft, robbery, misrepresentation, espionage, or breach of a duty to maintain secrecy. The law establishes civil remedies such as injunctions and damages for actual loss and unjust enrichment, or a “reasonable” royalty where an injunction is not feasible. If a trade secret is “willfully or maliciously” misappropriated, damages may be doubled. Trade secrets are broadly defined to include all forms and types of information that the owner has taken reasonable measures to keep secret, and which derive independent, actual or potential economic value from being unknown to the public. Continue reading ›

NPR Reports: Lawsuit Will Decide Who Owns ‘Star Trek’ Language Klingon

May 7, 2016 | Peter S. Lubin and Patrick Austermuehle

Paramount Pictures holds the copyright to Klingon, spoken by some characters in “Star Trek.” A group called the Language Creation Society says that’s not right. The Hollywood Reporter says the group sued saying Klingon is a real language, Paramount can’t copyright it any more than it could English or Chinese. Paramount has been forced to defend itself by arguing that Klingon is fake and therefore in reality useless. Continue reading ›

“You’re Hired: Now Hand Over the Goods”

January 8, 2015 | Peter S. Lubin and Patrick Austermuehle

Trade Secrets: Buckley v. Abuzir, 2014 IL App (1st) 130469

“You’re Hired: Now Hand Over the Goods”

In addition to potential tax advantages, the principal reason to create a corporation is limited personal liability, which means that the debts and liabilities of the corporation are distinct from those of its shareholders. However, in certain circumstances, courts are empowered to ‘pierce the corporate veil’ and impose personal liability on the officers and potentially even the shareholders of a corporation if there has been gross undercapitalization of the corporation, or if corporate funds have been improperly comingled with non-corporate funds, or if it finds that a ‘sham’ corporation has been designed to improperly shield the individual directors or shareholders from personal liability.

What if, in order to obtain proprietary information, an employer created a sham corporation, hired you as an employee, and then claimed your former business’s lifeblood — all its proprietary trade secrets? That is what is alleged in the April 2014 Illinois appellate case, Buckley v. Abuzir, 2014 IL App (1st) 130469. Continue reading ›

Federal Court Applies State Law in Finding Covenant Not to Compete Unenforceable – Fields v. QSP, Inc.

August 18, 2013 | Peter S. Lubin and Patrick Austermuehle

After a woman filed suit against a fundraising company for alleged payroll violations, the company brought counterclaims against her, including a claim for alleged breach of a covenant not to compete. Fields v. QSP, Inc. (Fields 2), No. CV 12-1238 CAS (PJWx), opinion (C.D. Cal., Jun. 4, 2012). The plaintiff filed the lawsuit as a putative class action on behalf of employees subjected to employment practices that allegedly violated the federal Fair Labor Standards Act (FLSA) and various California statutes. After hearing several competing motions for summary judgment and judgment on the pleadings, the court dismissed some of the plaintiff’s employment law claims and retained others. It also ruled that the covenant not to compete in the plaintiff’s employment contract was unenforceable under California law.

The defendant, QSP, Inc., serves a nationwide clientele of youth organizations and schools. It employed the plaintiff from 1999 to 2010, primarily as a “Sales and Service Specialist.” Her job involved researching and contacting potential clients, assisting “field sales managers” (FSMs), and maintaining a database (the “QSP Database”) of current and prospective school customers. A covenant not to compete in her employment contract stated that she may not contact fundraising organizations that she “solicited or serviced during [her] employment by QSP” for a period of twelve months. Fields 2 at 12. QSP alleged that the plaintiff did not delete the QSP Database from her computer when her employment ended, and used the database to provide services to QSP’s competitors.

Court Rules that Parent Company, After Acquiring a Subsidiary, May Not Sue to Enforce the Subsidiary’s Employment Agreement – CDW, LLC, et al v. NETech Corporation

November 29, 2012 | Peter S. Lubin and Patrick Austermuehle

An Indiana federal district court ruled, in CDW, LLC, et al v. NETech Corporation, that neither a parent company nor one of its subsidiaries may sue to enforce the employment contracts of another of its subsidiaries, when one subsidiary is clearly the party to the agreement. The dispute involved covenants of noncompetition in a company’s employment contract and a claim for tortious interference with a business contract.

Berbee Information Networks Corporation employed several individuals as sales executives. These three individuals signed employment contracts that included a paragraph stating that they agreed, upon termination of their employment with Berbee, not to accept employment in direct competition with Berbee for up to twelve months. “Competition” included solicitation of Berbee employees or clients and use of Berbee’s proprietary business information. In September 2006, Berbee became a subsidiary of CDW, LLC when CDW purchased it and merged it with another subsidiary. Berbee, all parties to the eventual lawsuit agreed, was the surviving corporation of the merger.

CDW operated several subsidiaries that, like Berbee, engaged in the business of technology sales. Each subsidiary served a different market, such as commercial businesses, nonprofits, or government agencies. CDW transferred the three Berbee employees at the center of the dispute to another subsidiary, CDW Direct, between 2008 and 2009. These employees all left CDW Direct at different times to work for NETech Corporation. They each received letters after commencing work at NETech from an attorney for CDW alleging that they were in violation of their noncompetition agreement, demanding that they cease work for NETech and return all confidential materials obtained from Berbee or CDW.