By: Alice Cabrera

The Department of Justice issued a "Summary of the Major U.S. Export Enforcement, Economic Espionage, Trade Secret and Embargo-Related Criminal Cases."

This report highlights the importance of trade secret protection and trade secret theft prosecution for the economic wellbeing of the United States. Public awareness of the repercussions of economic espionage and steps to prevent it are essential since this practice can better be tackled organically. Once the trade secrets are no longer such, even if prosecution is successful, the harm has been done. export-case-fact-sheet.pdf

By: Alison Grant

Wang had been accused of stealing trade secrets from Bridgestone's research facility and giving them to a Chinese polymer maker. The government said he used his insider status at Bridgestone to make off with confidential information such as the formulas and compound properties for race tires.

Prosecutors presented their case to U.S. District Judge James Gwin over two days in late September. Gwin then ruled there wasn't enough evidence to show that Wang was going to economically benefit from taking Bridgestone information or that he knew any theft would hurt the company.

With that, the case fell apart without ever getting into whether Wang actually took trade secrets.

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By: By JACOB BUNGE And DOUG CAMERON

A former computer programmer for CME Group Inc. CME -0.40% on Wednesday pleaded guilty to charges that he stole information from the futures exchange operator while pursuing plans to improve a trading platform in China.

Chunlai Yang, a senior software engineer who worked at CME for 11 years, pleaded guilty to two counts of stealing trade secrets, according to the plea agreement disclosed by the U.S. attorney's office for the Northern District of Illinois.

According to the plea deal, Mr. Yang started working on technology powering CME's front-end trading systems in 2000 and was a senior software engineer at the time of his arrest. He admitted to downloading more than 10,000 files from CME computers, and planned to offer improved technology to the Zhangjiagang Exchange.

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From: U.S. Department of Justice
Office of Public Affairs

WASHINGTON--Kolon Industries Inc. and several of its executives and employees have been indicted for allegedly engaging in a multi-year campaign to steal trade secrets related to DuPont's Kevlar para-aramid fiber and Teijin Limited's Twaron para-aramid fiber. The indictment seeks forfeiture of at least $225 million in proceeds from the alleged theft of trade secrets from Kolon's competitors.

The charges were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; and Jeffrey C. Mazanec, Special Agent in Charge of the FBI's Richmond Field Office.

"Kolon is accused of engaging in a massive industrial espionage campaign that allowed it to bring Heracron quickly to the market and compete directly with Kevlar," said U.S. Attorney MacBride. "This country's greatest asset is the innovation and the ingenuity and creativity of the American people. The genius of free enterprise is that companies compete on the excellence of their ideas, products, and services--not on theft. This indictment should send a strong message to companies located in the United States and around the world that industrial espionage is not a business strategy."

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By: Lory

In an attempt to regain control over company secrets, Apple requested that certain documents be sealed, claiming the information should be considered "trade secrets."

The document in question is regarding a partial summary of damages calculations with product-specific unit sales and revenue information. Judge Koh originally denied the request to keep the Damage Motion sealed citing that, because Apple is seeking an additional $535 million in addition to the, already awarded, $1.05 billion, the documents need to be revealed.

"As Apple appears to have realized in introducing that exhibit, it cannot both use its financial data to seek multi-billion dollar damages and insist on keeping it secret," Judge Koh wrote in her decision.

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By: Tricia Duryee

Following the departure of several high-level employees, Zynga is striking back by filing a lawsuit against one of its former general managers, alleging "the wholesale theft of some of its most sensitive and commercially valuable data."

Back in August, Patmore, Zynga's general manager of CityVille, left the company to work at a rival social games maker in San Francisco. Patmore had joined Zynga in June 2011, and served as CityVille's general manager before jumping to Kixeye to be its VP of Product. Kixeye is a much smaller Facebook games developer that has been extremely brazen about recruiting talent away from Zynga.

Zynga says Patmore took files that are critically important to the game maker's business, including revenue projections, monetization plans, more than 10 unreleased game design documents, employee compensation details, strategic road maps, and his entire email box, containing 14 months of confidential communications.

Zynga will return to court on Tuesday, where it will ask the judge to address its other requests, including the return of the data, access to Patmore's Dropbox account, and other details.

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By: Brad Dorfman

The maker of the Nabi tablet computer for children sued Toys R Us Inc on Monday, saying the world's largest toy retailer stole trade secrets in preparing to introduce the rival Tabeo tablet this month.

The introduction of Tabeo heated up the market for tablets designed specifically for children, which also includes players like LeapFrog Enterprises Inc's LeapPad.

Fuhu accused Toys R Us of fraud, breach of contract, unfair competition and trade secret misappropriation. Fuhu also said that Toys R Us copied Nabi's butterfly-shaped bumper,which is used to help protect the tablet, for Tabeo.

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By: JENNIFER PELTZ

When a former Goldman Sachs computer programmer was freed from prison after getting his software-theft conviction overturned, he declared that "justice occasionally works."

Six months later, Sergey Aleynikov faced new charges Thursday over the same allegations: that he copied valuable, secret computer code from the financial powerhouse as he was leaving for a new job.

This time, he's being charged under state laws, instead of the federal laws involved in his now-reversed conviction.

The Manhattan district attorney's office, which is bringing the new case, called it an appropriate use of state laws to pursue an employee who exploited his access to sensitive information. Aleynikov's lawyer called the new prosecution a vindictive, legally questionable effort to take a second swipe at a man who already served time for a crime judges later said he didn't commit.

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By Victoria Stilwell

Raytheon Co. (RTN) said it will continue to pursue claims against two companies for damages resulting from theft of trade secrets and misappropriation of intellectual property after the U.S. Court of Appeals favorably reversed an August 2009 decision by a federal district court in Texas.

The court overturned the district court's decision regarding claims against Indigo Systems Corp. and Flir Systems Inc. (FLIR) relating to infrared camera technology.

In 2009 Flir said Raytheon's claims were based on allegations that Indigo hired former Raytheon employees to obtain knowledge of the defense contractor's trade secrets about infrared camera technology, according to the Associated Press.

The district court in its earlier ruling held that Raytheon should have suspected wrongdoing and brought the lawsuit earlier, thus barring the company's claims.

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By Dean Wilson

A former employee of Intel has been given a three year jail term after being found guilty of stealing company secrets worth millions of dollars.

Biswamohan Pani, 36, stole chip manufacturing and design documents worth between $200 million and $400 million from the chip giant in May 2008 after announcing his resignation. He then took a job at rival company AMD.

The man pleaded guilty to five counts of wire fraud and was given a three year sentence, in addition to two years probation and a fine of $17,500, according to the Associated Press.

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By Penny Stacey

Oldcastle BuildingEnvelope™ (OBE) and Jon Todd Staley have settled their lawsuit. Staley, a former employee against whom OBE had filed suit last year, and OBE entered into an agreement by which Staley will pay the Santa Monica, Calif.-based company $10,000.

According to the order, the parties were able to settle the dispute "without admission of any wrongdoing or liability."

The $10,000 Staley will be required to pay is considered "partial compensation for [OBE's] fees and costs incurred in bringing this action," according to the order. Beyond that, each party will bear his or its own fees and costs incurred in connection with the case.

According to the consent order signed by the court, a third-party forensic review of Staley's personal home computer "found various Oldcastle business documents remained on his personal home computer following his separation from employment with Oldcastle."

The forensic services provider permanently deleted "such information from Staley's computer devices, and returned such computer devices to Staley on or about June 12, 2012."

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By Susan Berfield

A manager leaves his company to work for a rival. Happens all the time. Two months later, he is sued for breach of contract and he and his new employer are accused of "misappropriation of confidential information and trade secrets." Happens all the time. What's unusual about the case recently filed in U.S. District Court in Denver is that the two companies don't manufacture computer chips or cars or anything very sophisticated at all.

They sell organic milk. Turns out that's a pretty competitive business, too.

Horizon Organic, which is owned by Dean Foods (DF) and is the biggest supplier of organic milk in the U.S., sued Organic Valley, a dairy farmer cooperative that is the second-biggest supplier. The employee, Larry Hansen, was dairy operations manager for milk quality and supply at Horizon for four years before taking a similar job at Organic Valley. Horizon claims that Hansen had access to its supplier list, which it keeps confidential, as well as its purchasing price "tolerances and strategies" and sales demand projections, which it also closely guards. Horizon says that because of the sensitive information he was privy to, Hansen had to sign a nondisclosure agreement.

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By: Boyd Contreras LLP

California companies spend millions of dollars every year developing trade secrets - everything from complex processes and programs to simple customer lists. These companies need to be ever-vigilant in maintaining the secrecy of these trade secrets otherwise they risk losing the protection they are afforded for these secrets under the law. However, these protections do not always stop unscrupulous competitors and former employees from exploiting these trade secrets for their own gain.

Trade Secrets in California

Under California law, a trade secret is any information - including a formula, program, device, method, process, pattern, or technique - that "[d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use." Also, a trade secret owner must take all reasonable steps necessary under the circumstances to keep the information a trade secret - without which it may lose protection.

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By: Alison Grant, The Plain Dealer

A report prepared for a Mississippi court said Eaton Corp. and its lawyers undertook an "outrageous course of conduct" in attempting to tamper with the judicial system -- so outrageous, in fact, that the court had no choice but to dismiss Eaton's $1 billion trade-secrets lawsuit against a rival aerospace company.

The report, prepared by a court official known as a special master, was a pivotal setback for Eaton in its 10-year legal fight against Frisby Aerospace of Clemmons, N.C. (Read the full report (PDF); some sections were redacted on the copy obtained by The Plain Dealer.)

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By: THE HR SPECIALIST: MINNESOTA EMPLOYMENT LAW

The federal Computer Fraud and Abuse Act (CFAA) doesn't grant employers any legal recourse if an employee misuses information obtained from company computers, according to a recent Minnesota Federal District Court ruling.

The case involved architecture firm Walsh Bishops Asso ciates and three of its former employees. Management claimed that after they resigned, the three former employees used proprietary information taken from Walsh Bishops. The firm said those actions violated the CFAA.

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By: Brian Lockha

BRIDGEPORT -- Gov. Dannel P. Malloy said it may be necessary for the state to consider changes to the Freedom of Information Act to attract businesses to Connecticut by shielding certain aspects of economic development deals from public scrutiny.

"What people are saying -- and this is true (of) some of the larger employers we're trying to attract to the state -- is you're asking us to give you trade secrets. We're not going to give you trade secrets if you're going to distribute them to everybody, meaning the people we compete with," Malloy said in a brief interview Thursday. "I think people understand that when we're trying to attract jobs, requiring people to disclose information that their competitors can then use against them is not the best way."

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Eaton Corp. has fired two top attorneys as the company faces on-going scrutiny from a Mississippi judge about how controversial emails in a trade-secrets case popped up years after they were supposed to be produced.
By Alison Grant, The Plain Dealer

Eaton confirmed that Vic Leo, vice president and chief litigation counsel, and Sharon O'Flaherty, litigation counsel, have been let go.

A company spokesman would not say whether their departure is connected to a long-running legal battle in Jackson, Miss. The fight started in 2004 when Eaton filed a lawsuit against rival Frisby Aerospace alleging that five engineers stole company secrets when they left Eaton for Frisby.

Leo and O'Flaherty in recent days responded to an order by Mississippi Circuit Court Judge Jeff Weill that they file sworn statements with "full and detailed explanations" about two email strings related to the trade-secrets case that Eaton turned over to the court in mid-April.

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