SAN DIEGO--(BUSINESS WIRE)--Randy Broberg, a partner in the Del Mar Heights office of Allen Matkins Leck Gamble Mallory & Natsis LLP and chair of the firm's Technology and Intellectual Property Practice Group, is launching "The Licensing Lawyer," an educational podcast that addresses practical solutions to intellectual property problems.

The first episode of the podcast, located on the Web at www.thelicensinglawyer.com, covers trade secrets and how they are commonly lost. Future episodes will delve into identifying trade secrets, protecting trade secrets in the wake of departing employees, protecting confidential information and documents, computer security measures, non-disclosure agreements, protecting trade secrets from third party office or factory visitors, among others. The podcast can be streamed live and is also available for download on "The Licensing Lawyer" Web site.

Telecoms Korea, South Korea

The court said, "The offenders gained, leaked and used the trade secret about WiBro owned by Posdata even though they knew the secret would be used by others.

Check out the IntelliBriefs for some history on this case...

American Tire Corporation (ATC) has denied any involvement or relationship with Alpha Mining Systems' trade secret case as reported in the Herald-Tribune newspaper on January 31, 2008.

Chino, Calif. (PRWEB) - American Tire Corporation (ATC) has denied any involvement or relationship with Alpha Mining Systems' trade secret case as reported in the article "Tire maker wins trade secret case" published in the Herald-Tribune, a Sarasota, Florida newspaper, on January 31, 2008.

According to this article, "Sam Vance, Alpha's sales and marketing manager at the time, was found guilty by 12th Judicial Circuit Court Judge Robert W. McDonald Jr. of giving a pair of overseas competitors everything they needed to steal business away from the Sarasota company." "Alpha Mining Systems, a global manufacturer of industrial mining tires, has won a $19.7 million judgment against a former employee for handing out the company's trade secrets in 2005."

In this article, ATC is mentioned as follows: "For example, Del-Nat Tire Corp. and American Tire Corp. were buying a combined average of $1.9 million per month from Alpha until April 2005, when they stopped buying anything."

Based on the article "Tire maker wins trade secret case", ATC has received many enquiries from its global clients regarding the reported trade secret case handled by 12th Judicial Circuit Court Judge Robert W. McDonald Jr.

15 J. Intell. Prop. L. 39 (Fall 2007)

Charles Tait Graves

Introduction

There is perpetual tension in trade secret law over the breadth of the information a creative employee can freely take from job to job. The court that determines the metes and bounds of such information in each case must choose, consciously or not, between two oscillating poles. These poles-one of property rights and one of relational duties owed by subordinates to their principals-are the subject of a persistent philosophical debate among legal scholars about the proper underpinnings of trade secret jurisprudence. They are not binary opposites but, instead, represent an overlapping mix of policy preferences that trade secret law has never resolved.
Taking one side or the other matters. The property rights approach asks whether information is a trade secret through an objective comparison of a well-defined claim against generally known, available material. A relational approach, by contrast, is more likely to treat information as legally protectable when an employee has learned the information under a confidentiality agreement, regardless of whether the information is in the public domain. A split between these conflicting approaches has arisen in many, sometimes subtle ways over the decades. The split's most recent form is the debate over the preemptive effect of the Uniform Trade Secrets Act against alternative tort claims based upon non-secret information.
The scholarly debate about whether trade secrets are property and the on-the-ground conflicts between employer and employee are, therefore, more closely linked than is evident in the law review commentary thus far. This Article will review the major theories pertaining to whether or not trade secrets are property rights, examine the practical consequences of taking each side, and conclude that a property conception best serves the interests of promoting employee mobility and the freedom to use information in the public domain. The thesis of this Article is that conceiving trade secrets primarily as property rights rather than relational obligations better balances the interests of employers and departing employees faced with trade secret accusations. Specifically, a property-based conception of trade secret rights balances the interests of the employer-which provides the infrastructural nexus for creative work and, thus, deserves some return for that investment-with the interests of the workforce and the wider economy that benefits from the formation of new, creative enterprises.
This conclusion may be unexpected, because commentators concerned about the expanding reach of intellectual property laws generally oppose efforts to propertize information. Because the policies behind trade secret law derive in part from the hierarchical, pre-industrial master/servant relationship, however, the alternative to a property-based conception shifts power decidedly to the former employer and away from the former employee. A relational theory of *42 trade secret law emphasizes not the boundaries of the information at issue but the asserted disloyalty of the employee, who is alleged to have owed a one-way duty of fidelity to the employer.
Property, then, is a normative concept that can have important consequences for trade secret law. This Article will describe five litigation contexts where viewing trade secrets primarily as property rights can make a difference, including the fast-developing disputes over Uniform Trade Secrets Act preemption. It will also offer the first definition of a “public domain” for trade secret law that is consistent with the emerging theories of the public domain in other areas of intellectual property. In summary, this Article offers the following propositions:
· Theories of trade secret law tend to underemphasize employee interests;
· Courts tend to issue different trade secret rulings depending on whether they follow a property rights approach or an employer-centric, relational approach;
· The scholarly debate about whether trade secret law reflects property rights therefore has practical consequences for departing employees;
· A property theory of trade secret rights is imperfect but defensible and best balances the interests of employers and mobile employees;
· By contrast, trade secret theories premised on contract, unfair competition, or personhood are more likely to lead to a power imbalance between employers and employees;
· Finally, defining the public domain for trade secret law remains uncertain because of the conflict between the property and relational approaches.
Conclusions this sweeping cannot be asserted without supplying a philosophical basis that is more convincing than the alternative models others have offered in recent years. This is especially true given the uncertainty expressed by some scholars about the validity of trade secret law as an independent body of law in the first place. This Article will consider alternatives offered by commentators based on contract law, unfair competition tort theory, and personhood approaches.
To reach these propositions, and for purposes of a thought experiment, this Article will also reverse the traditional, dominant perspective, which addresses the validity of trade secret law from the standpoint of the owner of a potential secret. For too long, commentators from all perspectives-from Law and Economics to advocates for the public domain-have analyzed trade secret questions largely *43 in the abstract, as a matter of defining a company's rights against third-party outsiders. This approach is too limited because virtually all trade secret disputes involve former employees. Something of a Copernican reversal is needed: Once we consider problems from a new perspective, we more readily recognize the balance of competing interests that is at stake in the debates over trade secrets as property rights.
This Article has three parts. The first part is practical: it will explain why a property rights conception can make a difference in the outcome of a trade secret dispute between a former employer and employee. This part will explore areas of trade secrets where courts reach inconsistent results depending on their use of relational or property concepts (whether explicit or implicit). This discussion of conflicts in the case law comes before the theoretical discussion that is at the heart of this Article, because it is only with an understanding of how these cases unfold that the theoretical discussion will be compelling. Part of the contribution of this Article is to locate and parse trade secret cases whose differing results appear to be driven by incompatible underlying theories.
The second part is an overview and critique of the scholarly debate about whether trade secrets are property. This part will both explore non-property theories in light of the case law discussed beforehand and offer a balance between employer and employee under a limited property conception. The third and final part seeks to define the public domain for trade secret law, with an analysis of how the property rights debate plays directly into the difficulties currently facing that project.

Talhiya Sheikh*, Intern, SMEs Division, WIPO

Introduction

In today’s competitive business environment, employees can “make or break” an enterprise when it comes to intellectual property (IP) protection. While there are several legal and technical mechanisms that can be put in place for protecting IP assets of enterprises, employee loyalty remains one of the biggest challenges faced by enterprises in protecting their IP. This article discusses the need for enterprises to build strong employee loyalty as a key element in thier strategy for protecting trade secrets. The article draws attention to the principle ways that could be followed to obtain trust and commitment from employees, thus discouraging them from unauthorized disclosing the trade secrets of an enterprise.
The adage “information is power” is very relevant to the whole concept of strategic use of trade secrets. When used strategically, trade secrets often provide a significant competitive advantage in the market place. Further, trade secrets can be central to the creation of a market niche which competitors may find it difficult to penetrate. Competitive advantage is often acquired by simply keeping strategic information confidential or secret as outsiders are prohibited by law (in most countries) to use or copy secret or confidential information without the consent of the owner of that information. The law of trade secrecy discourages espionage/unlawful access to such information by punishing those found guilty of accessing information by improper means.

Trade secrets are but one tool amongst a collection of different intellectual property tools and when used appropriately complement and strengthen the other tools. Enterprises that successfully protect their trade secrets strengthen other IP assets that they have; for example, when Coca-Cola protects its secret formula as a trade secret, by doing so it also strengthens its trademark.

Since the market is changing so rapidly, and the fact that trade secrets can be independently discovered by others, enterprises are advised not to rely only on their existing trade secrets but to make continuous efforts to develop new trade secrets in order to remain competitive. In addition, this will be helpful in case of unwanted disclosure because the enterprises would be able to rely on a newer and better product or plan.

Associated Press

COLUMBUS, Ohio (AP) - The Ohio Supreme Court ruled today that memorizing a company's trade secrets is just as wrong as writing them down or copying them in some other format.

The court unanimously ordered a former employee of Al Minor & Associates to pay damages for memorizing a client list.

Robert Martin of Columbus was a pension analyst with Minor when he left in 2003 to start his own company.

Minor provides pension administration services. It sued Martin and accused him of taking 15 clients with him.

Martin recalled the company's client list from memory.

PR Newswire

CORAL GABLES, Fla., Feb 06, 2008 /PRNewswire via COMTEX/ -- VP Gables, LLC (formerly known as VinPlus, LLC), a previous provider of data management solutions, today announced that it has filed a complaint against The Cobalt Group, Inc., a provider of automotive marketing services headquartered in Seattle, Washington. VP Gables is seeking damages from Cobalt based on allegations that Cobalt violated obligations to VP Gables under the terms of a non- disclosure agreement, and made wrongful use of VP Gables' propriety information. Specific counts against Cobalt include: breach of contract; the misappropriation of VP Gables' trade secrets in violation of the Florida Uniform Trade Secrets Act; tortious interference with business relations; and violation of the Florida Deceptive and Unfair Trade Practices Act. The complaint was filed in the United States District Court in the Southern District of Florida.

ERCAN YAVUZ ANKARA

Amid controversy over a bill on state secrets, viewed by many as a major obstacle in Turkey's battle against gangs, the administration is preparing to submit another bill on trade secrets, banking secrets and customers' private information.

Law firm Nixon Peabody LLP has elected nine attorneys to its partnership, the firm said on Tuesday.

Two of the new partners are located in the firm's Boston office. Those partners are Gregg A. Rubenstein, who focuses on franchise and distribution litigation, complex commercial litigation, non-compete disputes and trade secret matters.

The other new Boston partner is Ruth H. Silman, who focuses on complex environmental and land use matters.

Nixon Peabody's Boston office has 160 lawyers and 680 total lawyers.

AL MINOR & ASSOC., INC., Appellee,
v.
MARTIN, Appellant.
Nos. 2006-2340, 2007-0121.
Submitted Nov. 6, 2007.
Decided Feb. 6, 2008.

Background: Employer brought action against former employee to obtain monetary and injunctive relief for violating Uniform Trade Secrets Act (UTSA) by contacting employer's clients from memory. The Court of Common Pleas, Franklin County, awarded damages, but denied injunction. Former employee appealed. The Court of Appeals, Bryant, J., affirmed and certified conflict. Appeal was permitted.

Holding: The Supreme Court, O'Donnell , J., held that client list was a trade secret, even though it was memorized.

1. Information that constitutes a trade secret pursuant to R.C. 1333.61(D) does not lose its character as a trade secret if it has been memorized.

2. The Uniform Trade Secrets Act does not apply to the use of memorized information that is not a trade secret pursuant to R.C. 1333.61(D) .

Fry, Waller & McCann Co., L.P.A., Barry A. Waller , and Derek L. Graham , for appellee.

McNees, Wallace & Nurick, L.L.C., Samuel N. Lillard , and Elizabeth J. Birch , for appellant.

O'DONNELL , J.

Robert E. Martin, a former employee of Al Minor & Associates, Inc. ("AMA"), appeals from a decision of the Franklin County Court of Appeals that affirmed a trial court judgment that denied equitable relief but entered a $25,973 verdict in favor of AMA for fees not generated from former clients Martin had solicited using information he had memorized while working for AMA. The court of appeals also certified that its decision conflicted with the decision in Michael Shore & Co. v. Greenwald....

Guardan

You might have thought that US border controls were simply focused on keeping out the likes of Lily Allen and Amy Winehouse, who might well reduce the entire country to rubble (OK, they recanted).

But some companies now have a different issue. According to The Washington Post, Radius has now "tightened its data policies so that traveling employees must access company information remotely via an encrypted channel, and their laptops must contain no company information."
...

The Post quotes Mark Rasch, a technology security expert with FTI Consulting and a former federal prosecutor:

"Your kid can be arrested because they can't prove the songs they downloaded to their iPod were legally downloaded," he said. "Lawyers run the risk of exposing sensitive information about their client. Trade secrets can be exposed to customs agents with no limit on what they can do with it. Journalists can expose sources, all because they have the audacity to cross an invisible line."

MARTY RONEY Montgomery Advertiser PRATTVILLE, Ala.— A popular Prattville restaurant is hoping to take its barbecue sauce to the next level - the supermarket shelf. Danny and Gretchen Loftin opened Fat Boy's Bar-B-Que Ranch on the banks of Autauga Creek 10 years ago, and the business has grown like kudzu since. The couple has decided to bottle the restaurant's signature sauce and sell it at local retail outlets. The sky is the limit, said Danny Loftin. "The ultimate goal is to get in the large grocery stores," he said "We are going to go until we can't go no more." The bottles went on sale Feb. 3 at a local store. The label has a pen and ink drawing of the restaurant, and a few paragraphs on the label telling the Fat Boy's story. A 12-ounce bottle of the brown sauce costs $5.99. The ingredients are listed as pineapple juice, distilled vinegar, honey and spices. That's as much as Loftin is prepared to reveal about the ingredients - the proportions and mixture are a trade secret.

Thelen Reid Brown Raysman & Steiner A software licensor that should have known that the third-party software it included in its product improperly contained plaintiff's trade secrets may be liable for trade secret misappropriation, even if the licensor could not understand or decipher the object code embodying the trade secret. ClearOne Communications, Inc. v. Chiang, No. 2:07-cv-37, 2007 U.S. Dist. LEXIS 91693 (D. Utah Dec. 13, 2007). The court denied the licensor's motion to dismiss the plaintiff's trade secret claims, rejecting the licensor's argument that it could not be liable for trade secret misappropriation because it could not read the object code. The court ruled that there is no requirement of comprehension of a trade secret to state a claim for misappropriation under the Utah version of the Uniform Trade Secrets Act. The court also noted that the Act prohibits not only the disclosure of a trade secret, but also the use of a trade secret, where the defendant had "reason to know" that it was obtained by improper means. Opinion http://www.thelen.com/tlu/ClearOneVChiang.pdf

Robert Block | Sentinel Space Editor

Federal officials Monday arrested a former Boeing engineer on charges of stealing trade secrets from the space-shuttle, Delta IV-rocket and other programs and sending them to agents of the Chinese government.

In an indictment filed in California, prosecutors accused Dongfan "Greg" Chung, 72, of acting as an agent of the People's Republic of China in a case spanning 30 years.

The case highlights what government officials say are ongoing efforts by Beijing to steal U.S. space technology -- especially if it has possible military applications. The shuttle once was considered a military project and the Delta IV is used to launch reconnaissance and other top-secret satellites into orbit.

By Chet Brokaw, The Associated Press

Three Republicans joined with the Democratic minority to endorse the measure 18-15, giving it the minimum number of votes needed to pass the chamber. Republican Gov. Mike Rounds is opposed to the bill.

SB189 seeks to have South Dakota join the other 49 states with laws that presume state and local government documents are open to the public, said the measure's main sponsor, Sen. Nancy Turbak Berry, D-Watertown.

The bill also contains safeguards that would prevent the release of information about business secrets, criminal investigations, security measures and private information on people's health, finance and other subjects.

This Day (Lagos)

As Nigerian lawyers wake up to the vast potentials of e-commerce, JOHN OKONKWO harps on the need for government and corporate organisations to regulate the practice

An Acceptable Use Policy (AUP) is a critical legal instrument in managing e-commerce services. AUPs evolved out of the need to establish a clear governance roadmap to guide compliance with statutory and regulatory obligations.

In addition, AUPs aid organisations to reduce the risk of vicarious liability for a variety of employee actions. They also help to combat malicious Internet borne threats to enterprise information systems such as viruses, phishing and spyware.

So, the importance of an AUP cannot be over-emphasised, as it enables employees to understand the governance and legal implications of using information assets, as well as their rights and obligations when using enterprise information systems. This helps them to minimise the risk of data loss, data leakage and data spoliation.

...

The potential for employer liability does not end there. Employees, acting in the normal course of employment, can use email and IM to deliberately or inadvertently expose trade secrets, distribute protected works, violate confidentiality agreements, agree unfavourable contract terms, or collude to commit internal or external fraud.

This case settled with the parties agreeing to an injunction barring Satra from disclosing EPI's trade secrets or selling any product based on them. EPI alleged commercial damages and interference with its business relationship with Neuro-Fitness Health Directions.

In 2005, plaintiff Electromedical Products International Inc., a Texas-based medical device maker, sued Health Directions Inc. and Neuro-Fitness, LLC, medical device makers and former distributors of EPI's products, for allegedly manufacturing and selling devices based on EPI's trade secrets.

In February 2007, the case was settled. It was established during discovery that, in 2005, Neuro-Fitness was granted a license by electrical engineer Stephen Satra to produce the product in dispute, with Satra named as the developer of the product. Neuro-Fitness and Health Directions also entered into a joint venture agreement in which they shared Satra's product and manufactured the device together.
EPI sued Satra, alleging misappropriation of trade secrets, conspiracy, tortuous interference and unfair competition. EPI claimed that Satra conspired with Neuro-Fitness and Health Directions to duplicate EPI's proprietary technology.
Satra, a resident of Sebastopol, Calif., did not respond to the suit.
EPI sought an injunction barring Satra from disclosing the subject trade secrets or selling any product based on the secrets.

United States District Court, Northern District, Fort Worth

PUBLISHED IN: VerdictSearch Texas Reporter Vol. 8, Issue 7

Compliments of our friends at JurisNotes.com

(Fed Cir 2/11/08)

IR sued IXYS for patent infringement, with IR prevailing at trial; the Federal Circuit reversed the judgment of infringement and dismissed the cross-appeal as moot.

IR holds the '699, '725, and '767 patents, all of which disclose metal oxide semiconductor field effect transistors. A prior appeal in this matter was taken from summary judgment opinions in which the trial court held that the accused devices infringed the claims at issue. The Federal Circuit articulated revised interpretations of each term. As to the "adjoining" limitation, the Federal Circuit previously held that there could be no infringement. Regarding the remaining disputed claims, the Federal Circuit found that fact issues existed as to both the "polygonal" and "annular" limitations. On remand, the trial court concluded that the Federal Circuit's mandate with respect to the term "adjoining" pertained only to literal infringement. As a result, the issue of infringement under the doctrine of equivalents was tried to a jury, which found that the accused devices infringed the "adjoining" claims by equivalents. The jury also found that the accused devices met the "polygonal" limitation under the doctrine of equivalents, but that they did not possess any "annular" source regions.

IXYS argued that IR was foreclosed by prosecution history estoppel from resorting to the doctrine of equivalents as to the "adjoining" limitation. During prosecution of the '699 patent, IR chose to introduce the term "adjoining." This term excluded structure that might have been covered by the original claim language because the "support body" of the old claim was only required to "support said lightly doped major body portion," not necessarily to touch it. The amendment therefore narrowed the scope of the claim. IR's decision to claim structure using the limiting term "adjoining" could not be described as only tangentially related to the equivalency of a structure with non-adjoining regions. Accordingly, prosecution history estoppel barred IR from asserting infringement of the "adjoining" limitation under the doctrine of equivalents. IR also argued that IXYS was precluded from contesting the presence of annular source regions in the accused devices because it failed to contest that limitation in the submissions required under the local rules. However, this argument was raised and rejected by the Federal Circuit in the prior appeal. The Federal Circuit's mandate in the prior appeal required the trial court to treat the "annular" limitation the same way in all three patents. The combination of the Federal Circuit's mandate in the prior appeal and the jury verdict of non-infringement as to the "annular" limitation compelled a judgment of non-infringement regarding the remaining asserted claims.

Fulton County Daily Report

EXTREME COMPETITION and fluid work force bring more employer actions against
those who walk out with client lists and patented formulas

TRESA BALDAS

DEPARTING EMPLOYEES who steal company secrets on their way out are a growing problem for corporate America, prompting employers to step up legal actions against computer data thieves.

Labor and employment attorneys say that given the highly competitive nature of today's business world and a more fluid work force, corporate espionage has become a growing threat for employers.

The culprits, they say, range from employees who steal information to start their own business to those who leave to work for a competitor and want to take patented formulas, strategies or customer lists with them.

In New Jersey, an employer is suing a group of former senior-level employees, alleging that they improperly accessed the company's computer system, obtained revenue and marketing information and used the information to determine where to locate a competing business. The case is P.C. of Yonkers v. Celebrations! The Party and Seasonal Superstore, 2007 U.S. Dist. Lexis 15216 (D.N.J. 2007).

In Minnesota, a judge on Sept. 18 ruled that the former publisher of the St. Paul Pioneer Press unlawfully took confidential information and shared it with the paper's competitor, the Minneapolis Star Tribune, when he took over as publisher there.
Judge David C. Higgs found that Par Ridder, who was accused of leaving the paper with a laptop filled with confidential information, violated the state's trade secrets act and his common law duty of loyalty to the Pioneer Press. Ridder was barred from working at his new job for one year. The case is Northwest Publications v. StarTribune Co., No. C6-07-003489 (Ramsey Co., Minn., Dist. Ct.).

Lawyers note that, while corporate espionage is nothing new, what is new is the ease with which it can be done.

Intellectual Property Culture: Strategies to Foster Successful Patent and Trade Secret Practices in Everyday Business by Eric M Dobrusin and Ronald A Krasnow (Paperback - May 15, 2008)

Global Secrets: Global Trade Secret Protection (Globalization & Law) by C. D. Freedman (Hardcover - Jun 28, 2008)

Trade Secrets and Confidential Information Security Risk and Misappropriation by Ryan Conion (Hardcover - Feb 28, 2008)

Trade Secret Litigation: Practice and Strategy by David Quinto and Stuart Singer (Paperback - Aug 31, 2008)

A software licensor that should have known that the third-party software it included in its product improperly contained plaintiff's trade secrets may be liable for trade secret misappropriation, even if the licensor could not understand or decipher the object code embodying the trade secret. ClearOne Communications, Inc. v. Chiang, No. 2:07-cv-37, 2007 U.S. Dist. LEXIS 91693 (D. Utah Dec. 13, 2007). The court denied the licensor's motion to dismiss the plaintiff's trade secret claims, rejecting the licensor's argument that it could not be liable for trade secret misappropriation because it could not read the object code. The court ruled that there is no requirement of comprehension of a trade secret to state a claim for misappropriation under the Utah version of the Uniform Trade Secrets Act. The court also noted that the Act prohibits not only the disclosure of a trade secret, but also the use of a trade secret, where the defendant had "reason to know" that it was obtained by improper means.

By Ryan Derousseau

(FORTUNE Small Business) -- Dear FSB: Can I copyright bread? My wife makes a special kind of bread that's not available in grocery stores. We don't have our own baking facilities and would like to work with a local baker on a contract basis. So the issue is, how can we prevent the baker from stealing and using our recipe?

- Louis, Atlanta, Ga.

Dear Louis: Copyright doesn't protect recipes, but that doesn't mean the baker can steal your bread while it warms on the proverbial windowsill. Otherwise, Sara Lee (SLE, Fortune 500) could never have built a multi-billion dollar business.

A confidentiality agreement and a non-compete contract will help protect your intellectual property.

"Treat the recipe, the ingredients - at least the quantities - and the baking method, if novel, as trade secrets so that protection can exceed three years, the maximum in Georgia," says Glenn Lyon, a partner at MacGregor Lyon LLC, a law firm in Atlanta.

You may also be able to patent some unique or creative process in your recipe. But you don't want to copyright the recipe itself, because registered copyrights are public information. Anyone can read them.

That's why the Coca-Cola Company (KO, Fortune 500) didn't copyright the recipe for Coke. If it did, anyone could make their own Coke at home. They couldn't legally sell their homebrewed Coke, but no law would prevent them from drinking it.

You should talk to a lawyer about the specifics of non-compete and confidentiality agreement. Other intellectual property practices in the Atlanta area include Myers & Kaplan LLC, McClain & Merritt and Krevolin & Horst, LLC.

BEIJING (AP) — China on Thursday called U.S. allegations of Chinese spying "groundless" and urged the U.S. to stop its "Cold War thinking."

The reaction from a Foreign Ministry spokesman came after a U.S. Defense Department analyst and a former engineer for Boeing Co. were charged in separate espionage cases with handing over military secrets to the Chinese government.

"The so-called accusation against China is totally groundless. We urge the U.S. to stop its Cold War thinking and stop groundless accusations, and do more to contribute to our mutual trust and friendship between our two peoples," Foreign Ministry spokesman Liu Jianchao said at a regular news conference.

Liu said such cases brought by the U.S. did not help relations between the countries.

The U.S. Justice Department said the alleged spying attempts were the latest efforts by China to gain top-secret information about U.S. military systems and sales.

In the first case, prosecutors said weapons systems policy analyst Gregg W. Bergersen, 51, of suburban Alexandria, Virginia, sold classified defense information to a New Orleans furniture salesman. They said the salesman, a Taiwanese native identified as Tai Kuo, a naturalized U.S. citizen, forwarded the information to the Chinese government.

The data outlined every planned U.S. sale of weapons or other military technology to Taiwan for the next five years, the prosecutors said.

In the second, unrelated case, former Boeing engineer Dongfan "Greg" Chung, a 72-year-old naturalized U.S. citizen, was arrested on charges of working as an unregistered agent for the Chinese government who allegedly stole trade secrets from the defense contractor. The stolen data largely focused on aerospace programs, including the Space Shuttle, U.S. prosecutors said.

The case settled for $10 million from the TTS entities. The TTS entities also agreed to pay 10 percent of their gross margin for business with ETS's top 25 customers over 18 months, and restrict themselves from soliciting, hiring and contracting ETS agents or sales agents for 20 months.

ETS alleged several millions of dollars in damages. The company also requested an injunction enjoining the defendants from accessing ETS's computer system and using its trade secrets and other confidential and proprietary information in the marketplace.

According to court documents, plaintiff Exel Transportation Services Inc. provides transportation and supply chain management products and services to facilitate links between shippers and carriers in the manufacturing, retail and consumer industries. ETS contracts mostly through agents and salespeople.

In March 2006, ETS allegedly discovered that former employees were systematically accessing or "hacking into" its computer system and company e-mail accounts to obtain trade secrets and other confidential and proprietary information in order to help establish alleged rival companies Total Transportation Services, LLC and Total Transportation Services LP, both of Plano.

ETS sued former employees Michael Joseph Musacchio and John Michael Kelly and the TTS entities, alleging violation of the Computer Fraud and Abuse Act, the Stored Communications Act and the Texas Theft Liability Act as well as misappropriation of trade secrets, tortious interference and breach of contract. Another defendant, Joseph Roy Brown, was originally included as a defendant, but he was later dismissed without paying any money.

The plaintiff company alleged that the former employees now worked for the TTS entities, and that they used ETS computer passwords to hack into its computer system almost 1,200 times, accessing about 65 individual e-mail accounts. ETS further claimed that the defendants were using confidential company information to lure customers, employees and independent contractors to the TTS entities.

ETS also claimed that, while working for the company, the former employees acknowledged that they understood ETS's code of business conduct, which prohibits disclosing sensitive information about clients.
The plaintiff also sought actual, consequential, exemplary and punitive damages, attorney fees, prejudgment and postjudgment interest and court costs.

CHINA INTELLECTUAL PROPERTY LAW NEWSLETTER February 2008 News Briefs Trade secret infringement lawsuits exceeded 100 last year, with about 90 percent of civil lawsuits related to job-hopping, statistics released by public security administrations show. Some of the most sensational headlines in the disputes have come in the two-year fight over Foxconn's allegation that BYD appropriated one of its trade secrets. Many are calling it the nation's biggest-ever hi-tech intellectual property dispute.

STEVE ROBB
Messenger news editor

NELSONVILLE - Rocky Brands has filed a federal lawsuit against a former employee and one of its boot manufacturers, claiming they are using Rocky trade secrets to make "knock off" boots.

The lawsuit was filed last week in U.S. District Court against Glen Bratcher of Springhill, Tenn.; Westwood Footwear and Accessories, Nashville; and Nantong Hong Yi Wang Shoes Co. of China. Rocky is asking for preliminary and permanent injunctions against the defendants.

"Our customers have come to know and appreciate the integrity of Rocky boots," CEO Mike Brooks said in a statement from the company. "We are concerned that customers have been, and will be, confused as to the source of the defendants' boots by virtue of the defendants' apparent copying of Rocky's trademarks as well as Rocky's distinctive trade dress."

The term "trade dress" refers to the appearance of a product or its packaging.

John Triggs, an attorney representing Bratcher and Westwood Footwear, said he has asked Judge Edmund Sargus to expedite the case by bypassing the preliminary injunction stage and instead hold a hearing on a permanent injunction. That hearing is scheduled for April 21, he said.

Samantha Stainburn

Glen Belvis, 49, an intellectual property lawyer at Brinks Hofer Gilson & Lione in Chicago, how smart companies keep things under wraps.

When should companies use patents and when should they protect their inventions by calling them trade secrets?

A patent will allow you to stop someone who independently creates your invention. The trade secret only protects you from having someone directly steal your secret. You want to stay with patents for those things that are easy to copy. You go for trade secrets for things in your commercial process that give you a competitive advantage — a way of reducing the cost of manufacturing the product, a source of supply, your list of customers.

BBC NEWS

A controversial website that allows whistle-blowers to anonymously post government and corporate documents has been taken offline in the US.

Wikileaks.org, as it is known, was cut off from the internet following a California court ruling, the site says.

The case was brought by a Swiss bank after "several hundred" documents were posted about its offshore activities.

Other versions of the pages, hosted in countries such as Belgium and India, can still be accessed.

However, the main site was taken offline after the court ordered that Dynadot, which controls the site's domain name, should remove all traces of wikileaks from its servers.

The court also ordered that Dynadot should "prevent the domain name from resolving to the wikileaks.org website or any other website or server other than a blank park page, until further order of this Court."

Other orders included that the domain name be locked "to prevent transfer of the domain name to a different domain registrar" to prevent changes being made to the site.

Wikileaks claimed that the order was "unconstitutional" and said that the site had been "forcibly censored".

58 Hastings L.J. 777 (March, 2007)

Pamela Samuelson

Introduction
Preliminary and permanent injunctions are routinely granted in trade secret cases without offending the First Amendment, and this is as it should be. In the ordinary trade secret case, the misappropriator of trade secrets is an errant licensee, a faithless employee or former employee, an abuser of confidences, a trickster who uses deceit or other wrongful means to obtain the secrets, or a knowing recipient of misappropriated
information who is free-riding on the trade secret developer's investment. In such cases, injunctions merely require parties to abide by express or implicit agreements they have made, to respect the confidences under which they acquired secrets, and to refrain from wrongful conduct vis-à-vis the secrets.

On rare occasions, defendants invoke the First Amendment as a defense to claims of trade secrecy misappropriation. There is no consensus in the caselaw or law review literature about whether trade secrets are categorically immune (or nearly so) from First Amendment scrutiny and whether preliminary injunctions forbidding disclosure of informational secrets should be considered prior restraints on speech. This Article
addresses these and related questions and offers a set of principles for mediating the tensions that occasionally arise between trade secrets and the First Amendment.
Part I considers why conflicts between trade secrecy law and the First Amendment have thus far been relatively rare. Many trade secret injunctions do not raise First Amendment concerns either because of the nature of the secrets or of the conduct that trade secret law regulates. Various limiting principles of trade secrecy
law mediate most free-speech-related tensions likely to arise when someone wants to disclose information that another claims as a trade secret.

Part II suggests that conflicts between trade secret and First Amendment interests may increase in the upcoming years. The increased use of mass-market licenses aimed at maintaining secrecy for information that would otherwise be lawful to acquire and disclose is one source of greater tension. Another arises from proposals
to strengthen trade secret rights to safeguard them from threats posed by the Internet. DVD Copy Control Association v. Bunner illustrates these trends. If trade secret rights become stronger, conflicts with free speech interests become more likely.

Part III considers the contention that the First Amendment should have no role as a defense in trade secret cases, a view that the California Supreme Court arguably endorsed in Bunner III. This Part criticizes, among other things, the court's reliance on a characterization of trade secrets as property as a reason to reject First Amendment defenses in trade secret cases.

Part IV concludes that preliminary injunctions against disclosure of informational trade secrets should not be treated as prior restraints in ordinary trade secret cases. However, third parties who obtain trade secrets without participating in their misappropriation and who desire to publicly disclose these secrets as newsworthy contributions
to public discourse should not be enjoined from such disclosures without satisfying the rigorous First Amendment prior restraints doctrine.

Part V considers several other First Amendment due process issues, such as whether the burden of proof in third party disclosure cases should be higher than in normal trade secret cases and whether appellate review of constitutionally relevant facts should be de novo when First Amendment defenses have been raised.

Jacksonville Business Journal

The Florida Office of Insurance Regulation has filed an administrative complaint, seeking to suspend the certificates that allow the Allstate Cos. to write new insurance policies in Florida.

The OIR said the complaint is based in part on Allstate's failure to provide subpoenaed witnesses and documents, falsely labeling subpoenaed documents as trade secrets and falsely certifying its rate filings.

2007 Wis. L. Rev. 1041 (2007)

Elizabeth A. Rowe

I. Introduction

Late on a Friday afternoon in October, Wal-Mart executives discover that the content of their sales circulars for the entire Christmas season has just been posted on fatwallet.com, a bargain-shoppers discussion forum. The posted content includes Wal-Mart's closely guarded sale prices. Fearing that competitors may use the valuable pricing information to compete unfairly, Wal-Mart's attorneys immediately contact the operators of the Web site to request that they remove Wal-Mart's trade-secret information. The operators refuse. They contend, correctly, that since the information is not copyrighted, they have no obligation to remove it under the Digital Millennium Copyright Act (DMCA), which does not cover trade secrets. The information remains posted throughout the weekend and for another four days until Wal-Mart obtains a temporary restraining order from the court to have the material removed. By then, however, overjoyed shoppers have distributed the circulars all over the Internet, and, using this information, Wal-Mart's competitors are modifying their planned promotions.

This Article explores, for the first time, an existing void in trade-secret law. When a trade-secret owner discovers that its trade secrets have been posted on the Internet, there is currently no legislative mechanism by which the owner can request that the information be taken down. The only remedy to effectuate removal of the material is to obtain a court order, usually either a temporary restraining order or a preliminary injunction. When a trade secret appears on the Internet, the owner often loses the ability to continue to claim it as a trade secret and to prevent others from using it. Accordingly, trade-secret owners bear the burden of being vigilant and acting quickly if there is to be any chance of preserving the trade-secret status of the information. The current requirement of a court order for a takedown not only is costly but also is too slow for trade-secret owners because of the speed with which users distribute information over the Internet. Obtaining a temporary order from a court would likely take no fewer than several days.

Commentator Robert Reich says that when it comes to technology the government doesn't know what should be sold to foreign countries and what should be kept secret.

Judge says a guilty finding of corporate espionage would chill workers' rights to change jobs.

JOHN GITTELSOHN

A federal judge in Santa Ana acquitted an ex-Broadcom Corp. engineer on three counts of stealing the company's "crown jewels" on Tuesday in a criminal case that tested the rights of workers to change jobs.

U.S. District Court Judge David O. Carter wrote that the ex-Broadcom employee, Tien Shiah, could be subject to civil penalties for downloading thousands of corporate documents after he left Broadcom in 2003 to work for rival Marvell Semiconductor Inc. But it was a stretch to convict him on criminal corporate espionage.

"A contrary holding would not only deprive Shiah of his liberty without holding the Government to its high burden" of proving guilt beyond a reasonable doubt, Carter wrote in his 48-page opinion, "but it would also have a chilling effect on the ability of employees to move freely from one company to another."

Shiah, 40, hugged his attorney, Daniel Olmos, and then his wife, Margaret Juang, after Carter handed down the not-guilty verdict in the non-jury trial.

"It feels great, great to be exonerated," said Shiah, who still faces a civil suit by Broadcom in Santa Clara County Superior Court.

Larissa Nolan and Enda Leahy

Two high-powered businesswomen are battling it out in the High Court in a row that erupted over a multi-million euro contract to publish the Aer Lingus in-flight magazine.

Publisher Norah Casey, whose company Harmonia Ltd is the biggest magazine publisher in Ireland, and Mary Kershaw, her former employee, are on either side of the case, which involves claims of stolen corporate trade secrets.

Harmonia Ltd hired private computer forensics investigators and claimed that Ms Kershaw gave secret inside information to aid a rival firm to secure the tender for the contract to publish Cara magazine.

It is alleged that Ms Kershaw -- who was still working for Harmonia at the time -- gave the information to Max Media Communications, a company owned by another of Ms Casey's former employees, Garret Whelan.

MUMBAI: Microsoft has said its decision to share trade secrets about its software products is not a mere tactical response to anti-trust challenges in European Union, but a step forward in the way its software will co-operate with rival products and multiple devices. However, the company remains opposed to the open source movement’s fight against intellectual property, a top official said. “We recognise that increasingly our products have to live happily and co-exist with many, many other products in all those domains,” Microsoft chief research and strategy officer Craig Mundie told ET. “We are comfortable with competing in an inter-operable environment.” The world’s largest software company, which is in the midst of an attempt to acquire Internet rival Yahoo, said it will ensure open connections, promote data exchange, support common standards and engage with the open source movement. As a first step, the company published more than 30,000 pages of documentation for Windows protocols, agreed to licence them without discrimination and allowed open source programmers to build distributions on top of these protocols.

Paul Rolly

Given the Utah Legislature's tendency to interfere with the affairs of cities and towns, courts, schools and any other entity lawmakers want to bend to their will, it was just a matter of time before they gave themselves license to pry into your private affairs.

An Orwellian piece of legislation sponsored by Sen. Margaret Dayton, R-Orem, would give legislators the authority to examine records protected from public scrutiny by state law, including trade secrets, questions and answers for government license examinations, and competitive bids or grant applications.

Jordan Robertson, AP

SAN FRANCISCO -- Want to break into a computer's encrypted hard drive? Just blast the machine's memory chip with a burst of cold air.

That's the conclusion of new research out of Princeton University demonstrating a novel, low-tech way hackers can access even the most well-protected computers, provided they have physical access to the machines.

The Princeton report shows how encryption, long considered a vital shield against hacker attacks, can be defeated by manipulating the way memory chips work. The researchers say the ease of their attack raises fears about the security of laptop computers increasingly used to store sensitive information, from personal banking data, to company trade secrets, to national security documents.

The jury awarded $6,475,855.44 in compensatory damages and $17 million in punitive damages.

The jury found that the salaries of Innovative Technologies employees and its mapping strategies were trade secrets, or that Advanced Management Technologies and Kenton Trace Technologies misappropriated the plaintiff's trade secrets. Jurors found that the plaintiff suffered actual loss proximately caused by the defendants' misappropriation of its trade secrets or that the defendants were unjustly enriched by its misappropriation of the plaintiff's trade secrets.
They found that Advanced Management Technologies acted with purpose to procure contract breaches or terminate the business relationships the plaintiff had with its employees, and that there was no justification for Advanced Management Technologies' conduct. The jury found that Advanced Management Technologies' tortious interference with the plaintiff's business relationship and contracts with its employees was the proximate cause of the damages it suffered. Jurors found that Advanced Management Technologies engaged in a civil conspiracy with the individual defendants or the plaintiff's employees to cause it harm, which was a proximate cause of the plaintiff's damages.

Astrachan Gunst Thomas
Jim Astrachan

In a recent case, the likes of which we see too often, a modular home builder sued its competitor and four former employees for copyright infringement and misappropriation of its confidential information and trade secrets. The federal appellate decision emphasizes the universally recognized truth that a litigant must carefully tailor its request least a court give it too much.

Scott Lebson

Traditional intellectual property assets, i.e., those capable of registration with a central governmental authority such as patents, trademarks and copyrights, are particularly valuable because they enable companies to create and hold monopoly power on unique products and services. Key intellectual property rights can provide owners with significant business advantages by allowing, for example, the creation of specialized goods that are capable of generating high profit margins. In fact, the driving force behind many of the mergers and acquisitions completed during the past decade has been the acquirer's desire to obtain the target's intellectual property assets. Now more than ever, the full financial potential of intellectual property is being realized as an additional source of funding to facilitate research and development, acquisitions and other commercial transactions. Companies seeking additional sources of capital, lenders, venture capitalists and other members of the investment community are increasingly looking beyond a company's traditional, nationally registered intellectual property rights and recognizing the growing value in trade secrets, know-how and other non-registrable intangible rights. As secured transactions continue to player a greater role in extracting additional value from intellectual property rights, securitization of trade secrets has become a more widely recognized and necessary practice.

Superior Court of Pennsylvania.
The STANLEY-LAMAN GROUP, LTD., William G. Stanley, James J. Laman, Esquire,
Appellants
v.
Christian R. HYLDAHL
v.
William G. Stanley, James J. Laman, David Eaton and Stanley-Laman Group
Securities, LLC., Appellants.
Argued Oct. 2, 2007.
Filed Dec. 14, 2007.

Background: Employer brought action seeking injunctive relief as against former employee, and alleging misappropriation of trade secrets. Employee filed counterclaims asserting violation of wage payment collection law and breach of contract. The preliminary injunction was granted, and later the order was affirmed on appeal. Employer added claims of defamation and commercial disparagement, and employee amended counterclaims to add defamation and other tort claims against employer and another employing entity affiliated with employer. Employer raised preliminary objections to the amended

Summit TV takes a look at intellectual property in a 13 part series with leading specialists on the topic. The fourth show in this series features Claire Duggan from Sasol on when a trade secret strategy may be more appropriate than going the patent route