trade secret misappropriation

An American Arbitration Association arbitrator recently awarded Black Knight, Inc. (BK) $155M stemming from Pennymac Loan Services, LLC’s (Pennymac) alleged use of its mortgage-loan servicing platform to develop its own competing product. Though the arbitrator did not find Pennymac liable for trade secret misappropriation, they found that the use of BK’s product accelerated the development of Pennymac’s product and caused BK to lose licensing profits.

On November 1, 2023, a jury in the U.S. District Court for the Central District of California awarded damages to Skye Orthobiologics, LLC (“Skye”) and Human Regenerative Technologies, LLC (“HRT”) for breach of contract, breach of fiduciary duty, and breach of duty of loyalty by Skye’s former employee (“Defendant”). While Plaintiffs Skye and HRT did not succeed on their claim of trade secret misappropriation, they were able to succeed in showing Defendant misappropriated confidential information in breach of his employment agreements.

In an era where trade secret misappropriation battles can shape corporate landscapes, the Apple v. Rivos case stands as a stark reminder of the importance of diligent onboarding practices when it comes to trade secrets.  In this case, the court’s scrutiny of employee conduct underscores a crucial lesson: companies should ensure that new hires refrain from carrying confidential information from their previous employers. As exemplified by defendant Rivos, making an effort to remind new hires to avoid retaining confidential information can also go a long way.Here, we discuss the intricacies of the Apple v. Rivos case and provide several takeaways.

The 2016 enactment of the Defend Trade Secrets Act (“DTSA”) has led to an increase in trade secret litigation. The DTSA codified into federal law the right of an owner of a trade secret to sue in federal court when its trade secret had been misappropriated. Prior to the DTSA, with the absence of diversity jurisdiction, aggrieved trade secret owners had to pursue legal remedies under state law, typically under the Uniform Trade Secret Act (“UTSA”), which has been enacted by 47 states. Notably, the DTSA does not preempt state trade secret laws, therefore, aggrieved trade secret holders may seek civil remedies for alleged misappropriation under either state or federal law or both. Both the DTSA and the UTSA requires the trade secret owner to take reasonable measures to keep the trade secret information secret. The term reasonable can have many meanings in different contexts depending on a multitude of factors. As such, what may be considered reasonable efforts under one set of facts may be deemed deficient under another set of facts.

Life Sciences is an area ripe for trade secrets misappropriation litigation. In recent news, Merz Pharmaceuticals, LLC filed a lawsuit under the North Carolina Uniform Trade Secrets Act alleging that its former director of federal accounts, Andrew Thomas, stole trade secrets relating to Merz’s flagship botulinum toxin drug Xeomin®. Those secrets purportedly

In the United States, the scale of trade secret theft is estimated to be between $180 billion and $450 billion annually. Among the targets of this theft are pharmaceutical companies, which are some of the most research-intensive institutions in the world. Pharmaceutical research generally requires extensive work and often generates

In a significant recent decision, the Federal Circuit reversed a $66 million judgment against L’Oreal USA, Inc. for patent infringement and trade secret misappropriation asserted by Olaplex, Inc. The case arose as a result of L’Oreal and Olaplex entering into negotiations regarding a potential acquisition, pursuant to which Olaplex shared with L’Oreal its confidential information, including asserted trade secrets. L’Oreal subsequently walked away from the deal and launched competing products of its own. Though the parties’ negotiations were governed by a non-disclosure agreement, the Federal Circuit found Olaplex failed to prove that either its asserted trade secrets were actually trade secrets, or that L’Oreal had misappropriated them.