News pick of the day from Google News... Is Your Blog Leaking Trade Secrets? By Jeffrey Vance While organizations scramble to protect themselves against the next big TJX-style data breach, they're overlooking another risk: social networking. Nearly every organization has an in-house blogger -- officially or not. It doesn't have to be a Mini-Microsoft -- an insider blog often critical of the Microsoft – to pose problems. An enthusiastic employee who's not well-versed on corporate policy, a developer on public message boards, or even a personal blog where the employee occasionally discusses work all pose risks. A recent survey by Forrester Consulting looked at this and other content-security problems. The survey was commissioned by Proofpoint, a provider of email security and data-leak-prevention solutions. The July 2007 survey gathered 308 responses from U.S. companies with 1,000 or more employees. Forrester found that more twenty percent of those surveyed had investigated "the exposure of confidential, sensitive or private information via a blog or message board posting in the past 12 months." "Security and IT professionals are just starting to wake up to blogs and message boards," said Keith Crosley, Proofpoint's director of market development. "The main concern is still outbound email, but these other forms of messaging and networking can't be overlooked." Read the full story

From the halls of academia... John Quick, Controlling Pandora's Box: the Need for Patent Protection in Transgenic Research, 15 U. Miami Bus. L. Rev. 303 (Spring-Summer 2007) surveys the four current means of protecting genetically modified organisms:

Trade secret law is an attractive mode of protection since no eligibility requirements for protection exist. Moreover, with a potentially limitless timeline, it offers permanent protection to the inventor. Trade secret law views protectable subject matter through a functional definition. A trade secret can include almost anything so long as the company maintains the subject matter as a secret, it is not commonly known by competitors, and it would provide the company with a competitive advantage. The creation of a trade secret rather than a patent may be desirable to a company because unlike patents, a trade secret does not require the publication of the subject matter within eighteen months of the application for patent protection. Furthermore, the extent of patent protection appears to be under attack in at least one jurisdiction. The First Circuit Court of Appeals limited the Doctrine of Equivalence, holding that by narrowing a claim to obtain a patent, prosecution estoppel serves as a bar to suit against every equivalent claim of that nature.

News pick of the day... Microsoft's Reign Faces Key EU Court Ruling 13 September 2007, 10:24 CET Microsoft has fought back at every chance it gets, arguing that the Commission wants it to give away valuable trade secrets to competitors (BRUSSELS) - Microsoft's long-running reign over global software markets faces a crucial test on Monday when Europe's second-highest court rules whether an antitrust case by EU regulators against the company holds up. In what has become one of Europe's biggest legal battles, Microsoft is challenging a March 2004 anti-competition decision by the European Commission and the record fine of nearly half a billion euros that went with it. While the verdict will bring Microsoft's epic antitrust battles to a new climax, the decision by a special panel of 13 judges at the European Court of First Instance is unlikely to close the book on the case as it can be appealed. After a year and a half of deliberations, the judges at the Luxembourg-based court will weigh into the high-stakes standoff between the software giant and the European Commission when they hand down their ruling at 9:30 am (0730 GMT). However, the extreme technical complexity of the case makes it likely that the ruling -- the most important since the court's founding in 1989 -- will not give a clear-cut victory to one side or the other. "Whoever tries to predict the judgement is smoking dope," said one lawyer close to the case. However, "it's possible that judges give something to both sides." While a ruling against Microsoft could threaten the group's long-standing business strategy, a decision against the European Commission would deal a painful blow to the credibility of Europe's top competition watchdog. Both sides will have a little more than two months after the verdict to decide whether or not to lodge a new appeal with Europe's highest tribunal, the European Court of Justice. Read Full Story

From the halls of academia... Elizabeth A. Rowe, Saving Trade Secret Disclosures on the Internet through Sequential Preservation, 42 Wake Forest L. Rev. 1 (Spring 2007)

When, for instance, an employee discloses an employer’s trade secrets to the public over the Internet, does our current trade secret framework appropriately address the consequences of that disclosure? What ought to be the rule that governs whether the trade secret owner has lost not only the protection status for the secret, but also any remedies against use by third parties? Should the ease with which the Internet permits instant and mass disclosure of secrets be taken into consideration in assessing the fairness of a rule that calls for immediate loss of the trade secret upon disclosure?

News of the day... When Hypocrisy Punctured Morals Sunday Times (London) September 16, 2007 Hugh McIlvanney

It is hard for an outsider to find a mooring of unchallengeable truth in all the heavy currents of rumour, innuendo and allegation that have been sweeping through the murky waters of Formula One since that extraordinary sentence was passed on the McLaren team in Paris on Thursday. But one judgement is inescapable: there is a sickening hypocrisy at the core of the decision of motor racing's ruling body, the FIA, to punish McLaren as an organisation with a fine of $100m and the invalidation of points gained by their cars in this season's constructors' championship while at the same time decreeing that the men competing in those cars, Fernando Alonso and Lewis Hamilton, should be left untouched and free to continue their dramatic battle for the drivers' world championship. If the FIA considered the underhand acquisition of confidential technical information relating to the race cars of Ferrari by key figures at McLaren so prejudicial to Ferrari's interests, such a heinous violation of fundamental regulations, that the English team's participation in the constructors' championship of 2007 had to be obliterated, didn't that mean McLaren's cars, indeed their whole operation, had to be regarded as tainted by the industrial espionage? So how can it make sense, or represent justice, to rule that Alonso and Hamilton should keep all the drivers' points they have amassed? Isn't that a bit like disqualifying a horse but saying the jockey won the race?

From the practicing bar...For the Defense, by DRI, a national monthly newsletter for defense practitioners... SYSTEMATIC HIRING-AWAY Stop Competitors' "Corporate Raiding" Patrick D. Robben Patrick D. Robben is a litigation attorney with the law firm of Morrison, Fenske & Sund in Minnetonka, Minnesota practicing in the areas of commercial disputes, trade secrets and intellectual property law, and employment law.

Courts continue to struggle to find the legal theories necessary to adjudicate such claims. The days of the lifelong "company man" are long gone. One of the hallmarks of our modern economy is the tendency of employees to change jobs frequently during their careers. This worker mobility is a strength of our economy, as it helps employees find the position in which they would be most productive. Another hallmark of our economy is the transition from an industrial economy into an information economy in which the primary strength of many companies is the skills and expertise of its white collar workforce in handling information. Problems can arise when an employee who has gained access to confidential and proprietary business information during his or her employment leaves the employer to work for a competitor. States have established a regime of statutory and common law protections to protect former employers from the misuse of sensitive information shared with employees during their employment tenure. These laws incorporate the principle that employees should not be restrained from gainful employment, but should not disclose a previous employer's confidential information. Similar problems may arise for employers when workers who have earned goodwill with customers through the employment relationship depart the company. Employees may be held to contractual commitments to not immediately accept work with a competitor to avoid unfairly trading on that goodwill provided in part by the investment of the former employer. A large body of trade secret and noncompete agreement law has arisen to address these scenarios. A more unsettled area of the law involves the issue of "corporate raiding." Corporate raiding entails the systematic hiringaway of several employees by a competitor to attain a competitive advantage over the rival. In the absence of noncompete agreements, is such conduct by a competitor against a rival lawful? After all, employees should be free to pursue employment opportunities so long as they are not violating noncompete obligations or duties to preserve a former employers' confidential information. Courts continue to struggle with how to adjudicate such claims.

From today's news... David J. Lynch USA TODAY China's notoriously foul air isn't just a potential showstopper for next summer's Olympic Games in Beijing. Along with the country's polluted water and spendthrift energy usage, China's air-you-can-taste represents a glittering opportunity for U.S. companies peddling environmental wonder gear. "We've seen rather extraordinary growth, and there's really no end in sight," says Bill Taylor, president of ITT China. For decades after the 1949 Communist Revolution, China's leaders embraced a man-over-nature strategy that treated the environment like a sewer. Now, they're devoting intense attention to pollution and energy efficiency, largely because of the Beijing Olympics' approaching spotlight. Chinese officials want to avoid having the Games spoiled by images of masked or wheezing athletes. Companies specializing in "green" products — from mammoth wind turbines to water-treatment systems — already are profiting from China's belated recognition of the environmental cost it's paying for its fast-forward economy. One indication: Last year, U.S. companies exported to China more than $2.3 billion worth of environmental goods, more than three times the amount in 2002. That increase benefited companies from giant General Electric (GE) to start-up Transition Energy and outpaced the overall gain in U.S. exports to China of 149% over the same period. But U.S. companies' hopes for an environmental windfall are imperiled by intense competition from European and Japanese rivals, which enjoy strong backing from their governments, as well as Chinese policies designed to promote domestic suppliers. Companies producing environmental gear also face the customary headaches of doing business in China, including concerns that Chinese partners will steal their trade secrets and reverse-engineer American products. Read the rest of this USA TODAY story

From the practicing bar... Tyler G. Newby, CRIMINAL ENFORCEMENT OF FEDERAL INTELLECTUAL PROPERTY LAWS-AN OVERVIEW, 50-SEP Advocate (Idaho) 37 (2007) Tyler G. Newby is a trial attorney with the Computer Crime and Intellectual Property Section of the United States Department of Justice's Criminal Division. Prior to joining the Justice Department, he practiced civil intellectual property litigation in Silicon Valley and San Francisco.

Many intellectual property attorneys may spend their entire careers without coming into contact with the criminal provisions of federal intellectual property laws... Trade Secret Theft Nearly every state has a civil trade secret statute based on the Uniform Trade Secrets Act. Some states have also codified criminal penalties for willful trade secret theft. To fill the gaps in state criminal laws and to address situations where an individual may steal a trade secret from a company in one state for use in another state or country, Congress enacted the Economic Espionage Act (EEA) in 1996, which created the federal crime of trade secret theft. While the EEA borrows from the UTSA in many respects, such as in its definition of what constitutes a trade secret, it also has several material differences.

Posted today by the Asbury Park Press

Minneapolis Star Tribune publisher Par Ridder was barred from his job for a year by a judge, a victory for the rival St. Paul Pioneer Press whose trade secrets he was found to have passed on to his current employer. Judge David Higgs in St. Paul, Minn., ruled that Ridder violated the state's Uniform Trade Secrets Act and his "common law duty of confidentiality" by taking data from his old employer, the Pioneer Press. "There is no question that Ridder knew or at least should have known that the Pioneer Press information he took, used and distributed was confidential," Higgs wrote in a ruling Tuesday. "Ridder essentially grew up in the newspaper industry." The lawsuit by MediaNews Group Inc.'s Pioneer Press claimed that Ridder hurt the newspaper by taking advertising and budget data when he resigned in March.

Factoid of the day... There are over 1500 legal articles indexed over the last two decades dealing with trade secret law. The LRI database contains documents from the Legal Resource Index, which contains cover-to-cover indices to articles that have appeared in over 850 journals from the United States, Canada, Great Britain, New Zealand and Australia.

STEVE SILVEUS INSURANCE, INC., and Silveus Insurance Group, Inc., Appellants-Plaintiffs, v. Richard L. GOSHERT, Goshert Crop Insurance, Inc., Richard D. Goshert, Goshert Enterprises, Inc., David Goshert, Goshert Farms, Inc., Goshert Insurance, LLC, Richard Leroy Goshert, Inc., Rick Goshert Insurance, Inc., DLG Enterprises, Inc., Riedel ABC Corporation, and XYZ Corporation, Appellees-Defendants. No. 34A03-0603-CV-88. Sept. 12, 2007. An insurance agency sued former agents alleging claims including breach of contractual arrangement and misappropriation of trade secrets. Agents counterclaimed alleging claims including breach of agreement. After bench trial, the Circuit Court, Kosciusko County, Rex L. Reed, J., entered judgment for agents on breach of contract claim and for agency on misappropriation of trade secrets with equal damages. Agency appealed. Read the opinion

We will share our trade secrets from time to time on access to "grey literature" when doing research on trade secrets.

M. C. Debachere has written that it is easier to describe, rather than define grey literature. Collectively the term covers an extensive range of materials that cannot be found easily through conventional channels such as publishers, "but which is frequently original and usually recent" (Debachere 1995,94). Peter Hirtle in Broadsides vs. Grey Literature defines it as: the quasi-printed reports, unpublished but circulated papers, unpublished proceedings of conferences, printed programs from conferences, and the other non-unique material which seems to constitute the bulk of our modern manuscript collections (Hirtle 1991).

News of thew day... Robert Buderi Xconomy

In filings for the Massachusetts case, iRobot alleges that Ahed set up Robotic FX while he was still an iRobot employee. The suit charges that Ahed “transferred—without iRobot’s knowledge or authorization—iRobot proprietary information to Robotic FX. After leaving iRobot, Robotic FX began producing tactical robots derived from and incorporating iRobot’s confidential information and trade secrets. Robotic FX’s ‘Negotiator’ robot is a conspicuous and unmistakable copy, in design and functionality, of iRobot’s PackBot.” According to the suit, Ahed first worked at iRobot as a summer intern in 1999, and began full time work in July 2000. For both positions, iRobot states, Ahed signed Invention and Confidentiality agreements, both of which were attached to the filing. Ahed terminated his iRobot employment on June 21, 2002, the document states; that same day, he executed a termination document certifying that he had not retained any confidential information or material. However, iRobot alleges, a day later “Ahed logged on to iRobot’s network and transferred confidential and proprietary iRobot information via email from his iRobot email account to his external email account at Robotic FX.”

Cabbies Sue To Stop GPS Requirement NEW YORK - A group of cabbies sued city regulators Wednesday in an attempt to block a new requirement that all taxis be outfitted with global positioning systems and software that will record where they drive. The move comes two weeks after thousands of cabbies went on strike for two days to protest the rule. In the lawsuit, the drivers argue that the city overstepped its authority and acted unconstitutionally when it required the GPS units. Their lawsuit also makes the unusual argument that the GPS devices will give away trade secrets by disclosing the cabbies' driving patterns. Most taxi drivers, it explained, cruise routes of their own design that they believe lead to the most lucrative fares. From wire service reports

News of the day.... India: Protection Of Trade Secret 21 September 2007 Manisha Singh Nair

The importance of trade secret in the ambit of intellectual property has gained widespread recognition so much so that trade secret protection of working technologies has taken precedence over protection through patents. North Atlantic Free Trade Agreement (NAFTA) and Agreement on Trade Related Aspects of Intellectual Property (TRIPs; Art. 39) include specific provisions directed towards increasing the protection of trade secrets. Prior to these agreements, Article 10bis of the Paris Convention (covering unfair competition) provides support for international standards of trade secret protection but there is a lack of a comprehensive international treaty on the line of patent, copyright and trademark law. A lack of definition of what constitutes a trade secret also contributes to this amorphous state of affairs.

From the halls of academia... Brian M. Hoffstadt, Dispossession, Intellectual Property, and the Sin of Theoretical Homogeneity, 80 S. Cal. L. Rev. 909 (2007)

In the last several decades, the legal academy has devoted a great deal of attention to developing a cogent definition of “property.” During this period, scholars have grappled with the related question of how intellectual property rights--namely, patents, copyrights, trademarks, and trade secrets fit within emergent property theories. By and large, the academy has concluded that intellectual property qualifies as “property” under all of the relevant analytical rubrics. ... D. Trade Secrets Trade secrets are unique among the categories of intellectual property because they derive their value not from being publicly disclosed as patented inventions, copyrighted works, and trademarks typically are, but from remaining undisclosed. Trade secrets encompass any knowledge--ranging from source code for computer software to industrial processes to the formula for Coca-Cola-- that has independent value because of its secrecy. Thus, a trade secret is no longer protected if the owner includes the secret in a patent application or in a copyright registration *928 application, or if a competitor is able to independently develop or reverse engineer the secret from the publicly sold end-product. Although the Supreme Court has recognized that a trade secret has constituted “property” since 1984, Congress took no action to confer generalized federal protection on trade secrets property until 1996. Even then, Congress enacted a very narrow statute, thereby leaving primary responsibility for protecting trade secrets with the states. [FN118] Most notably, Congress created a statute that made it a crime to knowingly possess, copy, deliver, or steal a trade secret (1) that is related to a product in interstate or foreign commerce, if done so to injure the owner and benefit someone else; or (2) intending or knowing that the offense will benefit any foreign government, agent, or instrumentality. Attendant to the authorization to pursue criminal prosecutions, Congress also empowered the Attorney General to seek civil remedies to enjoin violations that would otherwise constitute violations of the criminal provisions. Congress did not create a civil remedy available to aggrieved trade secret owners, thereby leaving federal enforcement of trade secret rights--and any opportunity to obtain restitution or fines -to the federal government.

Newsof the day... Washington Post Included under the purview of the Cyber Program are counterterrorism, counterintelligence and criminal computer intrusion investigations; intellectual property rights-related investigations involving theft of trade secrets and signals; copyright infringement investigations involving computer software; credit/debit card fraud where there is substantial Internet and online involvement; online fraud and related identity theft Investigations; and the Innocent Images National Initiative." Read the full article

Agency Audit Verifies Whistleblower Mismanagement Charges Interior Continues to Mangle Indian Trust Accounts, Losing Millions Monthly By: Public Employees for Environmental Responsibility (PEER)

An internal report by U.S. Interior Department auditors confirms disclosures by an agency attorney concerning ongoing gross mismanagement of Indian land leases, according to a copy of the audit released today by Public Employees for Environmental Responsibility (PEER). The attorney whose charges triggered the audit is facing a proposed dismissal for revealing "trade secrets."

Hiawatha Bray Boston Globe Staff The former iRobot Corp. engineer accused of stealing company secrets said yesterday that iRobot operatives may have planted a key piece of technology in an effort to frame him. Read the full story

News of the day from nsnbc... TSMC 'misused' UniRAM trade secrets Kathrin Hille A US court ruled that Taiwan Semiconductor, the world's largest manufacturer of made-to-order chips, misused trade secrets of UniRAM Technology, one of its former customers. The United States District Court for the Northern District of California, San Francisco Division, awarded UniRAM US$30.5m in litigation, TSMC said yesterday.

From the bench... Supreme Court, Appellate Division, First Department, New York. CARTESIAN BROADCASTING NETWORK, INC., Plaintiff-Appellant, v. ROBECO USA, formerly known as Weiss, Peck & Greer, LLC, Defendant-Respondent. Aug. 16, 2007. An Internet advertising company with its principal place of business in New Jersey sued limited liability company with its principal place of business in New York, alleging that its trade secrets were misappropriated by two of defendants' employees and that the misappropriated secrets were given to plaintiff's competitor, a company with principal place of business in Massachusetts in which the two employees were investors. The Supreme Court, New York County, Charles Edward Ramos , J., 809 N.Y.S.2d 480, granted defendant's motion to dismiss complaint as barred by collateral estoppel. Plaintiff appealed. The Supreme Court, Appellate Division, held that adjudication in prior Massachusetts action that cited allegedly tortious acts of defendant's employees were not committed within scope of their employment was binding. Read the opinion if you want to register with Lexis One

News of the day... Patents vs. trade secrets: Protecting your IP Julie Fortier Ottawa Business Journal Staff

"In the software field, it depends on how much a company is planning to release to the public anyways and how easily something may be to reverse engineer. If you want to keep something secret, the protection is indefinite as long as you keep it a secret. (But) if someone independently comes up with the idea, you can't say they stole it from you." Mr. Behmann gave Google.com as an example of a trade secret that has worked very well for years. "You put in your search terms and you get the results, but there is a lot of stuff that goes on in the background. In their case, the way they rank the search results, they have kept that secret because it's not something that people can easily get at, it's all on their own servers." Mr. Hogg agreed that sometimes a patent isn't always the way to go. "Sometimes we look at something and say 'this is going to be negative value for us to patent this.' We're better off not telling our competition what the questions are," he said.

From the halls of academia... David R. Hannah MIT Sloan Management Review Reprint 47305; Spring 2006, Vol. 47, No. 3, pp. 17-20

Protection of trade secrets is largely a managerial issue, and firms need to take the appropriate measures to ensure that employees keep trade secrets from leaking. But many organizations make a number of crucial missteps, sometimes failing to implement the right precautions or relying on a well-intentioned but ineffective practice — or worse, a wrongheaded policy that only leads to more information being divulged. The following are the most common mistakes: giving short shrift to new-employee orientations, not communicating regularly with employees, signaling to employees that they aren’t trusted, punishing instead of helping employees, not practicing what is preached, forgetting to clarify who owns ideas, defining the scope of trade secrets too narrowly and failing to address the subject of departing employees. By avoiding such mistakes, companies can help ensure that their trade secrets indeed stay secret.

From the Legal Scholars Network... Secrecy and Unaccountability: Trade Secrets in Our Public Infrastructure DAVID S. LEVINE Charlotte School of Law; Stanford University - Center for Internet and Society

Trade secrecy - the intellectual property doctrine that allows businesses to keep commercially valuable information secret for a potentially unlimited amount of time - is increasingly intruding in the operation of our public infrastructure, like voting machines, the Internet and telecommunications. A growing amount of public infrastructure is being provided by private entities that are holding critical information about their goods and services secret from the public. This Article examines this phenomenon, which is largely unexplored in legal scholarship, and identifies a significant conflict between the values and policies of trade secrecy doctrine and the democratic values of accountability and transparency that have traditionally been present in public infrastructure projects.

For the fun of it... Sit back with some popcorn and enjoy the show. These are Flash files that take some time to load...sort of a puzzle from an NGO with a mandate to educate developing nations often with limited web infrastructure. Good stuff. “IP PANORAMA”, an advanced e-learning tool on intellectual property (IP) for business, is now publicly available in English from the website of the World Intellectual Property Organization (WIPO) IP PANORAMA 04: Trade Secrets Basics of trade secret Trade secret management program Misappropriation of trade secrets Violation of trade secrets A trade secret audit

From the boardroom... Chief Executive Magazine Issue 224 Lee Sands

From a top-level perspective, for China to be totally successful there still needs to be more systemic change. Enforcement of IPR needs to be a higher priority; police need to be better trained; thresholds for prosecuting criminals need to be lowered; requirements to disclose pertinent information and documents to opposing counsel need to be improved; the burden of proof should be shifted to infringers; and there should be better enforcement of injunctions. There are also many social issues that need to be changed; namely, local protectionism, organized crime’s involvement in infringement, lack of police resources and judges’ unwillingness to give long sentences.