by Kathleen Lynch | Feb 2, 2016 | Trade Secrets
On January 28, 2016, the Senate Judiciary Committee approved the Defend Trade Secrets Act. If the bill is made into law, it would create a cause of action in federal court for theft of trade secrets.
Most recent changes to the bill included issues relating to employee mobility, the statute of limitations, restrictions on seizure orders, and enhanced damages. The Committee adopted language that provides immunity for whistleblowers to protect employees or others from potential trade secret claims if they present information confidentially to relevant government officials or agencies in connection with a violation of law. The bill, S. 1890, now moves to the full Senate for consideration.
What is the take away here? If a federal trade secrets bill is passed, qualifying companies and individuals can use the federal court system to bring theft of trade secret actions or other trade secret causes of action against an alleged party. In addition, the federal trade secrets law, where applicable, would provide a unified and harmonized body of law where each of the 50 states has full authority in this area of law at present and not all of the states’ laws on trade secret matters are unified.
In addition, there are an increasing number of trade secret cases where the defendant is a foreign individual or entity. The federal laws in this matter would aid in bringing these parties into court and having greater strength to administer the court’s punishment. Finally, because federal courts presently handle all other aspects of intellectual property law: patents, trademarks and copyright, it is appreciated that the federal judiciary may be better equipped to handle trade secret cases as well. We will continue to keep an eye on this subject.
Protecting your innovative developments is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at [email protected].
by Kathleen Lynch | Nov 18, 2015 | Trade Secrets
Trade secrets are supposed to be just that-secret. Trade secrets should be protected through agreement, limited access, marking as such. All of these efforts are adopted with a goal to keep proprietary information away from competitors. However, in one recent case, even though a company had gone through all the measures described above, the court still ruled them as no longer being secret.
In Fleetwood Packaging v. Hein, Fleetwood accused a former employee of its parent company, Signode Industrial Group, of stealing company trade secrets along with several important customers. The former employee had been discovered to have downloaded company confidential information, including contribution reports which included pricing information, and discounts. The court found the Fleetwood had attempted to protect its contribution reports through the execution of confidentiality agreements, limiting employee access to information and marking appropriate documents confidential. However, Fleetwood was also found to have shared this information with its customers! Because the customers were not part of Fleetwood any trade secret protection available was negated and the cause of action related to those reports was dismissed.
What’s the take away here? Treat your trade secrets as such-secret. Don’t share them with your customers or anyone else outside of your organization with a properly executed confidentiality agreement. Limit access to your proprietary information and monitor the access to detect any sudden and unauthorized or unnecessary downloads. In addition, be sure to mark all appropriate documents, including things such as white boards, demo products, etc. as “proprietary” or “confidential.”
Protecting proprietary information is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at [email protected].
by Kathleen Lynch | Apr 7, 2015 | Trade Secrets
As the mother of boys and an IP attorney, this story hit me in more ways than one. Four young men who were part of a computer hacking ring plead guilty to breaking into computer networks of technology companies and the U.S. Army and stealing more than $100 million in intellectual property and other data. One of the young men was 18 years old.
Allegations of the cyber theft included software and data related to the Xbox One gaming console and Xbox Live online gaming system; popular games such as “Call of Duty: Modern Warfare 3” and “Gears of War 3”; as well as software used to train military helicopter pilots.
The Assistant Attorney assigned to the case stated “the American economy is driven by innovation. But American innovation is only valuable when it can be protected. Today’s guilty pleas show that we will protect America’s intellectual property from hackers, whether they hack from here or from abroad.”
The ages of the other young men are 20, 22 and 28. The men were from the United States and Canada. The estimated value of the intellectual property and data that the defendants stole is between $100 million and $200 million. The United States has seized over $620,000 in cash and other proceeds related to the conduct.
So, don’t underestimate the value of your trade secrets or proprietary information. Do what you can to protect it. In addition, keep an eye on your kids!
Protecting proprietary information is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at [email protected].
by Kathleen Lynch | Feb 3, 2015 | Innovation, Patent, Trade Secrets
Unitherm Food Systems, a food process machinery manufacturer, recently discovered that you cannot seek both patent and trade secret protection for the same innovation. Unitherm filed an action in 2014 against Hormel for disclosing Unitherm’s trade secrets to a competitor. Unitherm’s alleged trade secret focused on a method for pre-cooking sliced bacon.
In 2007, both companies executed a joint development agreement for developing an oven that would produce high levels of steam for cooking. Under the agreement, Hormel would own all intellectual property. In 2008 Unitherm filed a patent application covering the process of cooking food at high steam levels. Hormel withdrew from the agreement with Unitherm and filed for patent protection in 2010 on its own method of cooking bacon. Unitherm alleged that the method claimed by Hormel was that developed by Unitherm during the course of the joint development agreement and was proprietary.
The court threw out Unitherm’s claim for misappropriating its trade secret. The judge told Unitherm that they could not maintain a trade secret on something for which they were seeking patent protection.
Take away: you can’t claim something as a trade secret if you are going to try to obtain patent protection for the same innovation. Best practice: first figure out what is the best avenue for protection for your innovation (i.e. patent, design patent, trade secret, etc.). Then, try to obtain that protection for your innovation to the greatest extent allowed by law.
Protecting your innovative developments is critical to any organization. Having the right person to help you make that decision is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at [email protected].
by Kathleen Lynch | Nov 18, 2014 | Trade Secrets
A trade secret is the secret sauce of any business. It is information that sets your company apart from you competition and it is information that your competitors would find valuable. The good news about trade secrets is that their life is limitless. The bad news is that once a trade secret has been exposed, it is gone forever.
Trade secrets can include items of information that you may not immediately consider are valuable. But if you think of what your competition might find valuable, your scope may widen. For example, trade secrets may include pricing, customer or supplier lists, employee names and contact information, and manufacturing practices.
Protecting a trade secret from exposure is critical. The first thing to do is identify all of your organization’s trade secrets or otherwise proprietary information. Next, you should limit access to the information only on a “need to know” basis. This means that manufacturing may not need to have access to pricing information, while accounting may not need to know the nuances of some manufacturing techniques that enhance quality.
In addition, employees should be trained on how to handle trade secret information. Once trade secrets have been inventoried, those within an organization designated as “need to know” should understand how to protect the trade secrets entrusted to them. A confidentiality agreement should always be used when disclosing any trade secret information, including agreements with employees.
Protecting proprietary information is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at [email protected].
by Kathleen Lynch | Aug 26, 2014 | Confidentiality, Entrepreneur, Intellectual Property, Inventor, Patent, Trade Secrets
I had lunch with a colleague who is an IP attorney and an engineer. He was telling me about his participation in a start up weekend and all of the challenges and fun that he had. In hearing this, we discussed, as patent attorneys do, the consequences of disclosing ideas to a loosely held group of people whose only relationship to each other is on the back of a napkin.
Most start up weekends do not impose any obligation of confidentiality on their attendees for all that is developed and disclosed in a 48 hour period. This raised the concern that perhaps anything that is developed that may be rather meaningful, i.e. might lead to actual commercialization of a product or service, may need to be “black boxed”. In other words, the team of developers could agree to disclose only the basic outline of the structure and/or function of the development and then disclose the details of the operation once a patent application has been filed or a confidentiality agreement has been signed.
To do otherwise may jeopardize the group’s ability to seek meaningful protection which may likely translate directly into meaningful funding. The US patent system has moved to a first inventor to file system. In that system, the inventor has a year to file on the invention developed after it has been disclosed. The rest of the world essentially requires absolute novelty. So if any invention is disclosed prior to a patent filing, any international patent rights outside the US may be lost completely. This is something worth considering when venturing into a start up weekend.
One aspect of any new development is the extent of patent protection available to the ultimate product or service. If all international patent protection is lost by the close of a start up weekend as a result of disclosure, then the level of funding and any significant patent advantage may be lost. It remains that anyone involved in a start up weekend should ask the appropriate questions regarding disclosure with the organizers and raise any concerns with the team as it could impact the protection and funding of what may be developed during the weekend.
Protecting your innovative developments is critical to any start up venture. Having the right person to help you make that decision is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at [email protected].
