by Kathleen Lynch | May 27, 2016 | Innovation, IP Management, Start Up Considerations
Earlier this year, I wrote about the federal Defense of Trade Secrets Act passed by the senate. This month, President Obama signed the act into law. The law (“DTSA”) creates a federal cause of action for theft of trade secrets. This means that the owner of a trade secret that has been stolen or disclosed can sue in federal court.
There is a whistleblower provision that grants immunity from a theft of trade secret claim to anyone who makes a disclosure in confidence to either (1) a federal, state, or local government official, or (2) an attorney, as long as the reason for disclosure is for the sole purpose of reporting or investigating a violation of the law.
The whistleblower provision requires employers to provide notice to all employees. Failure to do so will void an employer’s ability to take advantage of the DTSA’s provisions regarding exemplary damage awards (up to twice the damage award) and attorneys’ fees in cases of willful violations.
What’s the take away here? It is in every employer’s best interest to include the new notification in any employee agreement relating to trade secrets, confidentiality and/or nondisclosure obligations. This would include
- Non-compete agreements
- Consulting agreements
- Employment agreements
- Separation agreements
- Retention agreements, and
- Independent contractor agreements.
It would be wise to also include a notice in any employee handbook or new employee orientation materials.
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 | Apr 19, 2016 | IP Management, Start Up Considerations
I wrote earlier this year in my blog about a pending trade secret bill approved by the judiciary committee in the senate. Recently the senate passed the Defend Trade Secrets Act. The act essentially provides for a federal cause of action for trade secret cases. The bill is now in the house and is expected to pass. President Obama has shown his support for the bill.
While the federal law is pending, state trade secret laws are the only remedy currently available. Recently Epic Systems brought a trade secret case against Tate Group, an Indian company, for theft of trade secrets, computer fraud, breach of contract and unfair competition in the western district of Wisconsin (case 14-cv-748-wmc). The jury awarded Epic $240 million in compensatory damages and $700 million in punitive damages. The jury found Tata guilty of downloading documents from hospital software and providing those documents to one of its subsidiaries, Med Mantra. If Epic ends up collecting the award, it will be more than double Epic’s expected annual profits this year.
What’s the take away here? If you are the owner of trade secrets-protect them. Ensure that you have implemented systems and educated your people on best practices to keep your trade secrets confidential. If someone takes your trade secrets without authorization, go after them. Hopefully you will be able to do that in federal court in the near future. If you are working with companies that have trade secrets, make sure you abide by the terms of the confidentiality agreement and treat the trade secret information in the same manner as you would treat your own proprietary information.
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 | Sep 9, 2015 | IP Management
Southwest Energy Company recently found itself in the cross hairs of a trade secret dispute. It seems that a pair of geologists and an engineer created a detailed study of the drilling and fracing opportunities in East Texas. The team had identified 10 “sweet spots” for development and had begun leasing the targeted acreage so that a plan ready for drilling could be supplied to the highest bidder.
Apparently, Southwest Energy met with the trio and signed a confidentiality agreement. After reviewing the information and the proposal, Southwest declined to purchase the drill-ready plan. However, a year later, Southwest Energy purchased large amounts of acreage in and around the identified “sweet spots.” The geologists and engineer found this too coincidental and brought an action for theft of trade secrets.
A Texas court agreed with the trio and awarded a judgment of 40.2 million dollars. On appeal, the judgment was reduced to 11.4 million for lost profits. The case is currently pending before the Texas Supreme Court.
What’s the take away here? Regardless of your industry-protect your confidential information. It may be a supplier list, a pricing structure, or a manufacturing technique. Use the tools available to maintain these company secrets. Whether it is in the form of a confidentiality agreement, restricting physical access within your site, or conducting periodic training sessions to remind employees of the value of certain information, keep ahead of any potential leak. Once a trade secret has been disclosed, you cannot get it back.
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 | Jan 29, 2015 | Entrepreneurship, Patent Prosecution, Start Up Considerations, Trademark Service Mark
Intellectual property is the life blood of many small businesses and entrepreneurial enterprises. Knowing how and what may need protection could mean the difference between success and failure. I set forth below three basic things every entrepreneur and business person should do to protect the intellectual property inherent in any organization.
- Identify your intellectual property
- Before you can protect your intellectual property assets, you need to understand what they are. Intellectual property is a bundle of legal rights. These consist essentially of patents, trademarks, copyrights and trade secrets. Patents are directed primarily to objects of manufacture (things), methods of making or doing something, designs (ornamental aspects of a thing), compositions of matter and plants. If you make devices or compositions of matter, you will likely want to determine whether your device, composition, or methodologies associated with your business may be subject to patent protection. If you make an object, you may also want to consider whether there are any ornamental aspects of your object that may be new and subject to design patent protection.
- If you use trademarks, service marks or logos in connection with the sale of your goods or services, you may want to register those marks or logos nationally or internationally. If your business involves training or educational services, any materials used may be subject to copyright protection. If your business has been successful by using particular strategies or processes that have given it a competitive edge over your competition, you may want to properly identify those strategies as trade secrets. Some methodologies used in manufacturing may be better suited to trade secret protection rather than patent protection.
- Determine whether your intellectual property can be protected
- Once you have identified what you believe to be your intellectual property, you need to determine whether it is protectable under current laws. If you believe your new widget is patentable, a patentability search and assessment is a logical next step. A patentability search and assessment will provide you with the information you need to determine whether there is any meaningful patent protection available to you. This applies to objects, as well as methods, compositions of matter, and designs. A proper patentability search will search all relevant patent records and provide you with the most pertinent documentation of the state of the relevant art. A patent professional can assist with interpreting the search results to determine the scope of patent protection likely available to your invention.
- Similarly, with a trademark or logo, an availability search and assessment is a prudent next step. This involves searching relevant records to provide you with current uses of the same or similar marks or logos. From this information, you can determine whether to proceed with a trademark or service mark registration. A trademark professional can help you make that determination.
- Protect What Intellectual Property You Can
- Once you have identified and determined what rights are available to you, you can proceed with protecting your intellectual property to maximize your competitive advantage. Patentable aspects of any objects, methods, compositions or designs should be protected. Marks or logos available for use and registration should be the subject of US or international trademark or service mark applications.
- Copyrighted materials should be marked with the “©” or “Copyright” followed by the year(s) in which the material was created and name of the owner. Trade secrets, properly identified, should be protected through a series of procedures identified by your organization to ensure confidentiality. This may include, by example, limiting access to certain information, marking documents as “confidential”, ensuring all employees understand their obligations to maintain secrecy of proprietary information, executing confidentiality agreements with third parties where proprietary information may be exchanged.
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].
