Santa Clara Computer and High Technology Law Journal
January, 2008
Katarzyna A. Czapracka

This paper examines the divergent approaches to application of antitrust principles to trade secrets in the EU and in the U.S. The U.S. antitrust enforcers recognize the need to protect trade secrets and treat them as a type of intellectual property. By contrast, the European Commission takes the view that trade secrets do not merit the same level of deference as that accorded to intellectual property rights. In Microsoft, the Commission decided that Microsoft's refusal to disclose secret interoperability information to its competitors constituted an abuse of a dominant position because the refusal created an unfair competitive advantage for Microsoft. Moreover, as the recent controversy over the implementation of the Microsoft decision shows, the Commission position is that Microsoft does not have the right to charge royalties or control the secret interoperability information it was forced to disclose, unless such information qualifies for patent protection. The source of these divergent approaches may be the lack of harmonized EU standards of trade secret protection. Whereas U.S. antitrust authorities naturally relied on the harmonized principles of trade secrets law, the EU antitrust enforcers, lacking such uniform standards, have been using competition law to shape substantive trade secret laws. In doing so, they have undermined national trade secret protection measures and thus created a legal environment which may discourage private R&D investment and impede diffusion of technologies.

By Agenna Mathley

Strict data protection and data privacy regulations, intellectual property protection and human resource practices are some of the key priorities today's high-tech executives must balance in managing their organization's legal priorities. These were among the key discussion points at a management seminar held November 11, 2008 by the Technology Association of Georgia's (TAG) Finance Society.

Some of the top priorities discussed by the panelists included:
-Managing patents and trade secrets: many high tech organizations are faced with the challenge of managing patents and/or trade secrets as core assets of the organizations. Executives should ensure the documentation and competitive viability of the patents are up-to-date.

To read the complete article posted in techlinks.net please click here.

By Kenneth J. St. Onge
Insurance Journal

A document management company that allowed a client's sensitive documents to be taken is not covered by a professional liability policy with an intellectual property exclusion, the Massachusetts Supreme Judicial Court has ruled.

In September 2002, a Uniscribe supervisor authorized an employee working on the DirecTV project to bring his nephew to assist the Uniscribe employees in meeting Jones Day's deadlines. The nephew worked for approximately 10 days and was paid cash by his uncle, who recorded the nephew's hours as overtime. The nephew came across documents containing confidential trade secret information from DirecTV and sent that information to a Web site to help the "hacker" community.

To continue reading this interesting article click here.

By Aria Munro

PLANO, Texas -- Barb Ashbaugh is in the business of helping people and organizations reach their maximum potential, and Ashbaugh is a big believer in practicing what she preaches. Over the last 20 years, her Plano-based company, Ashbaugh's Trade Secrets LLC, has helped dozens of organizations from an array of industries including aeronautics, finance and health care, to increase efficiency, productivity, and profitability by using leading-edge evaluation and training to improve performance. Ashbaugh's Trade Secrets recently became one of only 610 out of 70,000 performance management and training consultants nationwide to earn the Certified Professional in Learning and Performance (CPLP) credential from the American Society for Training & Development Certification Institute.

In order to read the complete news article from enewschannels.com, click here.

By Marilyn Tennissen

Light-sensor company Texas Advanced Optoelectronic Solutions has filed suit against Intersil Corp., alleging the California-based maker of semiconductors infringed a patent for digital ambient light sensors used in flat panel displays.

TAOS is claiming not only patent infringement, but also breach of contract under California law, trade secret misappropriation under Texas law and tortious interference with prospective relations under Texas law.

To read the complete article posted in the Southeast Texas Record, click here.

By Liz Kowalczyk
The Boston Globe

Consumer advocates have been pushing for rules that require companies to disclose the full nature of their relationships with physicians, but biotechnology and pharmaceutical companies have been lobbying the Department of Public Health, which wrote the regulations, to exempt the disclosure of payments to doctors for research and research-related activities, arguing that such public scrutiny would scare off companies from funding clinical trials in Massachusetts.

In the proposed regulations, the department states that it sought to limit undue industry influence over physicians' prescribing behavior while not hampering research and requiring disclosure of trade secrets.

To read the complete article click here.

By Carlos Lago
Motortrend

After Quantum and Fisker announced they had received proper funding in late October and would proceed with the Detroit Auto Show project, Tesla cancelled its contract under CEO Elon Musk's direction. On April 14, 2008, Tesla filed suit against Fisker, alleging fraud, breach of contract violation of the Uniform Trade Secrets Act, and unfair competition. Fisker and Tesla then entered arbitration.

Tesla now owes Fisker a whopping $1,144,385.03 for attorneys' fees and costs.

To read the complete article, please click here.

By Linda Stamato
NJVoices

Sealing settlements from public view is a court practice that limits accountability to the public, erodes public justice, and, undermines democracy. It raises grave public concerns. Alan Medvin, the lawyer who argued the case for Public Citizen, said he hopes the decision by the appeals court gives judges pause before ordering documents hidden from public view.

While the presumption against sealing is gaining support, there are ways to make it more secure. Consider the following proposition in this regard: when the parties have gone to court--a public resource that serves justice--and reached a settlement, as a general rule the terms should not be accorded the protection of the court for secrecy; indeed, they should be made fully available to the public. Where parties can show a compelling reason to vitiate the policy regarding disclosure, however, courts could, on notice and hearing, protect confidentiality. Thus, for example, courts could protect trade secrets in a settlement when other terms are made public.

To continue reading this interesting article click here.

By JOE McDONALD

BEIJING (AP) -- The Chinese government is stirring trade tensions with Washington with a plan to require foreign computer security technology to be submitted for government approval, in a move that might require suppliers to disclose business secrets.

China has one of the largest technology markets, with more than 253 million Internet users and 590 million mobile phone accounts. It has tried to leverage that to promote its high-tech industries, which lag foreign competitors.

In 2001, Beijing tried to require computer and software suppliers to disclose how their encryption systems worked. That was scrapped after companies said the demand was too broad and trade secrets might fall into the hands of Chinese competitors.
China also developed its own standard for third-generation mobile phones to compete with two global standards. But it agreed to let Chinese carriers use all three standards after U.S. and European officials expressed concern that it might try to keep out foreign technology.

To read the complete article from The Associated Press, click here.

By: Sverre Roang

Preparing a protection plan

A better approach is to actively seek out and define the information, processes, and expertise within your company that are valuable and will remain valuable so long as they are secret. The next step is to implement a trade secret protection program. Having a solid business plan in place to protect your trade secrets allows you to: (1) more concretely identify your trade secrets; (2) decrease your risk of loss; (3) deter theft and carelessness with your valuable information; and (4) demonstrate that your company is serious about safeguarding its most valuable assets.

The type of information or material comprising the trade secret is not overly important. Trade secrets can encompass a very broad range of ideas, processes, discoveries, and information. The critical issues are how do they add value to your company and what does your company do to adequately safeguard them? This is important because protection of trade secrets is never automatic. They are protectable only if you take affirmative steps to preserve them.

To read the complete article from wisetechnology.com, click here.

BUSINESS WIRE

According to the law firm of Dion-Kindem & Crockett, the U.S. District Court ordered today that Kate Hudson and David Babaii for WildAid LLC respond to 220 Laboratories' lawsuit as it was originally filed against them. The District Court rejected the defendants' argument that 220 Laboratories' claims are preempted by the Copyright Act; the lawsuit will be sent back to be heard by the Superior Court of the State of California. The Defendants would have reframed the case as copyright infringement in contrast to the seventeen counts filed by attorney William E. Crockett on behalf of 220 Laboratories that include misappropriation of trade secrets, fraud and breach-of-contract.

To finish reading this interesting story from marketwatch.com click here.

By Kate Fazzini

IBM was alarmed when Mark D. Papermaster, a 26-year veteran assigned to an "elite" unit with access to closely guarded information about the company's technology and business strategies, told his superiors that he planned to take a job with Apple Inc.

Employment lawyers say that the unusual dispute involving two industry titans illustrates the increased willingness of employers, driven by rough economic times and a deepening interest in protecting proprietary information, to litigate over noncompete agreements in New York courts.

In the IBM case, Papermaster signed a one-year noncompetition agreement. The agreement acknowledges that "the disclosure of any (confidential information including expansion plans, client data and trade secrets, among other information) could place the Company at a serious competitive disadvantage and could do serious damage, financial and otherwise, to the business of the company."

To read the complete article from New York Law Journal click here.

by Marc Gallagher

The news that the Federal Reserve refuses to disclose the recipients of $2 trillion in lending leaves me (and should leave you) madder than hell.

If every emergency, no matter how slight, results in the immediate suspension of our right to know, then one might reasonably question whether it is a right at all and whether this is a democracy.

Some of us would make the argument that the Federal Reserve is not a government organization, but a private cartel, and so is not bound by the Freedom of Information Act. It is interesting that they didn't use that as a defense but rather chose to use "trade secrets".

To read the complete article posted in Liberty Maven click here.

By Jonathan Ellis
Argus Leader

The people of South Dakota have partnered with the video lottery industry for nearly 20 years, but the people know very little about their partners. South Dakota law bars citizens from accessing other than the most basic information about the industry. South Dakota Lottery officials have details about the casinos and their owners at their fingertips but cannot release them.

"If you were in Oregon and you wanted a list of all our retailers, you could have that in three or four hours in an Excel spreadsheet," said Mary Loftin, spokeswoman for the Oregon State Lottery.

Video lottery retailers in Oregon sign contracts with the state to host the games and the state owns the machines. In South Dakota private businesses own machines. With the exception of Social Security numbers and trade secrets, "Everything here is public," Loftin said.

To read the complete article from argusleader.com please click here.

Columbus sued King and Alliance Castings Co. for misappropriation of trade secrets and related claims. The trial court granted summary judgment in favor of Alliance and the appellate court affirmed in part and reversed in part.

Both Columbus and Alliance produce bolsters for railroad cars; bolsters are steel crossbeams that are positioned under railroad cars for support and stabilization. The production of bolsters requires the use of a bolster milling machine. In 2003, Columbus retained King to build a replacement bolster milling machine for use at its foundry. Alliance learned of this and asked Blake, who was doing consulting work for Alliance, to find out who made the machine for Columbus. Blake determined that it was King that built the machine and Blake went to King's foundry to inspect the machine before it was shipped to Columbus. Columbus later learned that Alliance had retained King to build it a bolster milling machine. According to Columbus, the machine built for Alliance by King was essentially the same as the one produced for it. The trial court held that Columbus had failed to produce evidence showing that Alliance used improper means to acquire the information, or that Alliance knew or had reason to know that the information was acquired improperly.

This court held that a fact issue existed concerning whether there was a misappropriation of a trade secret. There was no dispute that a fact issue existed as to whether at least some of the information concerning the bolster milling machine built for Columbus constituted a trade secret. The dispute centered on whether a misappropriation had occurred. It was Columbus' contention that Alliance misappropriated its trade secrets due to Blake's misrepresentation to King that he worked as a consultant for both Columbus and Alliance, which allowed him to gain access to the machine being built for Columbus. Alliance responded that it could not be held liable for the acts of an independent contractor and that it did not know of Columbus' claim that the bolster milling machine was a trade secret. There was testimony in the record that Blake introduced himself as working for both Columbus and Alliance when he arrived at King to look at Columbus' machine. However, the testimony before the trial court was conflicting on this point. A finding that Blake had introduced himself in this manner would support a conclusion that Alliance had reason to know that the information was acquired improperly. The court rejected Alliance's contention that it was necessary for Columbus to prove that Alliance knew or had reason to know that the information was Columbus' trade secret. The statute did not provide that the misappropriating party had to have actual or constructive knowledge of who owned the trade secret.

The law firm of Magleby & Greenwood, P.C. scored a multi-million dollar damages award for ClearOne Communications, Inc. in a jury trial for misappropriation of trade secrets (and other claims) conducted last month, presided over by Judge Tena Campbell. ClearOne's attorneys were James E. Magleby, Jennifer F. Parris, and Christopher M. Von Maack. The trial was held in the District Court for the District of Utah, with ClearOne suing Biamp Systems Corp., WideBand Solutions, Inc., three of WideBand's principals, and Versatile DSP, Inc. The complaint alleged the theft of certain algorithms and computer code. The jury returned a verdict in favor of ClearOne and against all of the defendants. The jury awarded ClearOne approximately $3.5 million in compensatory damages and $7 million in punitive damages, concluding that defendants willfully and maliciously misappropriated ClearOne's trade secrets. ClearOne is a communications solutions company that develops and sells audio conferencing systems and related products.

The Chinese government is stirring trade tensions with Washington with a plan to require foreign computer security technology to be submitted for government approval, in a move that might require suppliers to disclose business secrets. Rules due to take effect May 1 require official certification of technology widely used to keep e-mail and company data networks secure. Washington complains the requirement might hinder imports in a market dominated by U.S. companies, and is pressing Beijing to scrap it. [Washington Post]

In 2007, plaintiff Telsa Motors Inc., a producer of electric cars based in San Carlos, hired Fisker Coachbuild, LLP to design the interior and exterior of the WhiteStar, a proposed all-electric, four-door sedan.
In November, the design was completed, and the relationship ended.
At about the same time, Fisker Coachbuild and Quantum Technologies agreed to form Fisker Automotive Inc. with the intent to produce plug-in hybrid electric vehicles based on Quantum's proprietary drive-train technology.
In January 2008 at the Detroit Auto Show, Fisker Automotive presented Karma, a non-working model of its proposed four-door hybrid sedan.
Telsa Motors sued Fisker Coachbuild, its principals Henrik Fisker and Bernhard Koehler, and Fisker Automotive, for stealing trade secrets and breach of contract.
Fisker contended that it did not breach the contract or use any of Telsa Motors's alleged trade secrets in designing Karma, in that it was a completely different car than the WhiteStar.
Fisker further claimed that designing other cars, such as Karma, was expressly authorized under its contract with Telsa.
Defense counsel asserted that the suit had been brought in bad faith to stop Fisker from getting financing for the start-up company, Fisker Automotive, and to prevent Karma from reaching consumers.

PUBLISHED IN: VerdictSearch California Reporter Vol. 8, Issue 1

Provider of investment banking services brought action against clients, alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and misappropriation. Clients filed counterclaims for breach of contract and professional malpractice. Parties cross-moved for summary judgment.

Holdings: The District Court, Chin, J., held that:

(1) alleged lack of consideration did not preclude enforcement of addendum to
parties' contract;

(2) provider's rights under addendum were not limited to a transaction involving
a $300,000,000 senior secured credit facility;

(3) claim for breach of implied covenant of good faith and fair dealing was
redundant of breach of contract claim;

(4) clients did not misappropriate providers' trade secrets;

(5) provider was entitled to a fee for credit facility arranged during
exclusivity period by another investment banking firm;

(6) provider had no special relationship with clients giving rise to tort-based
duty independent of parties' contractual obligations, as would support malpractice
counterclaim; and

(7) existence of genuine issue of material fact precluded summary judgment for
provider on clients' breach of contract counterclaim.

Motions granted in part and denied in part.

Dale Wallis sued PHL and others for using a vaccine that she allegedly invented; PHL filed a cross-complaint against Dale Wallis, James Wallis, and Hygieia Biological Laboratories for misappropriation of trade secrets. A jury trial was conducted on the complaint only, with the jury finding in favor of Wallis. In connection with the cross-complaint, the trial court imposed sanctions against attorney Mendoza and her clients, which the appellate court affirmed.

Dale Wallis, a former PHL employee, sued PHL and others for using a vaccine that she allegedly invented for bovine mastitis; PHL cross-complained for misappropriation of trade secrets. The parties in this case agreed to a protective order, which allowed the parties to file under seal certain confidential documents containing alleged trade secrets. PHL filed the declaration of its attorney, Griffin, with attachments containing what PHL alleged were trade secrets. The attachments contained vaccine formulas and other confidential information. This document was filed in response to a motion filed by the Wallises asking the court to reconsider its holding that PHL's designation of alleged trade secrets was adequate. Although the declaration designated that it was filed under seal pursuant to the protective order, the document later appeared in the court file available to the public. Upon learning of this, Mendoza informed her clients and, in an attempt to defeat PHL's claim that the information attached to the declaration contained trade secrets, Mendoza and her clients had third-parties view and copy the declaration. PHL filed a motion for sanctions against Mendoza and the Wallises for their conduct relating to the declaration. The trial court granted the motion, finding that the actions of Mendoza and her clients had been undertaken in bad faith.

The totality of the circumstances surrounding the Griffin declaration would have made it clear to any reasonable attorney that it was filed under seal. The cover of the declaration stated as much and arrived in Mendoza's office in a box stamped "confidential." Many of the pages were marked with a notification that they were confidential under the protective order. Mendoza recognized the contents of the declaration as the trade secrets that were subject to the misappropriation action. Mendoza acted surreptitiously to have her clients or others view the contents of the declaration while it appeared unprotected in the court file in order to argue later that the trade secrets had been made public. Mendoza's contention that she told PHL about the public availability of the declaration and that PHL did nothing about it was unconvincing. Even assuming that the alleged trade secrets lost their status as such after being revealed to the public in the court's file, Mendoza violated the protective order by informing her clients and others of the accessibility of the Griffin declaration. The protective order applied regardless of whether the attachments to the declaration actually contained trade secrets. The protective order provided a procedure for challenging the status of a confidential filing, but Mendoza made no attempt to follow this procedure. Any reasonable attorney would have believed that, to act in good faith, the proper course was to seek guidance from the trial court under the protective order.

12/1/08 Ins. & Tech. 15 (2008)
Anthony O'Donnell

The Delaware U.S. District Court has dismissed both Accenture's trade secret misappropriation charges against Guidewire Software and Guidewire's subsequent charges claiming that Accenture's allegations constituted bad faith litigation that was harmful to Guidewire's prospects in the marketplace. While the court's Oct. 8 decision to accept motions from both parties to dismiss certain charges, expressed in an opinion written by Judge Sue L. Robinson, puts an end to substantial aspects of Chicago-based Accenture's suit against Guidewire - at least for the time being - an Accenture source notes that the company's patent infringement case against Guidewire is "alive and well."

Accenture's suit, filed in December 2007, is related to Guidewire's interaction with Chicago-based P&C carrier CNA, which in 2003 accepted a bid for Guidewire's claims solution at a price $10 million less than Accenture's bid for implementation of the Accenture Claim Components solution. Accenture questioned Guidewire's (San Mateo, Calif.) ability to provide an acceptable solution to the carrier within the given time frame. Guidewire "seemed to have a surprisingly quick development trajectory, particularly in light of its small size and relatively light experience in the insurance market," Accenture alleged, inferring from that speedy trajectory that Guidewire "somehow gained access to Accenture trade secrets in creating its software and services."

By Jeff Ostrowski

For decades, Charles Ponzi has been known as the king of the scammers. But Bernard Madoff makes Ponzi look like a piker.

After all, Ponzi raised a measly $15 million back in 1920, a fraction of the $50 billion Madoff is alleged to have swindled.

In one tactic repeated by Madoff, Ponzi insisted that he couldn't reveal his method for profiting from this difference in currency values. The strategy, he argued, was a trade secret.

To continue reading this interesting article from palmbeachpost.com, click here.

By Anastasia Beverly Hills

Marking a significant win for small, independently owned companies, especially those whose protected trade secrets are illegally exported abroad, Anastasia Beverly Hills has won a multimillion dollar trade secret judgment against Japanese company LuyVie, Inc. The judgment was ordered by the U.S. District Court, Central District of California.

Anastasia Soare, owner of the Anastasia Beverly Hills salon and product line, became aware that LuyVie, Inc., the proprietor of a Tokyo eyebrow salon, was using identical techniques and branding to those patented by Soare. Upon further investigation, it was discovered that employees of LuyVie, Inc. were trained in Los Angeles by Soare for the specific purpose of opening an Anastasia Beverly Hills salon in Japan and had signed a confidentiality agreement.

To continue reading this interesting article, click here.

By Richard Raysman and Peter Brown
New York Journal

According to the U.S. Patent and Trademark Office, U.S. intellectual property is worth more than $5 trillion.

Intellectual property is considered a "general intangible" within the meaning of UCC §9-106. As such, intellectual property that may be used as collateral in a security transaction in the asset-based lending context includes trademarks and trade names, patents, trade secrets, copyrights, and software, as well as contract rights such as software licenses (which, in essence, is the right to exploit the intellectual property without liability for infringement). See generally T.S. Note Co. v. United Kan. Bank & Trust (In re Topsy's Shoppes Inc.), 131 B.R. 886, 888-889 (Bankr. D. Kan. 1991).

Domain names, along with other intangibles such as trade secrets fall within the UCC's definition of general intangibles. A domain name can have significant value, akin to the value of a unique telephone number for a business. For example, earlier this year the domain name "fund.com" was sold for nearly $10 million. Over the last decade, courts have wrestled with the issue of whether a domain name is intangible property, or merely representative of a contract between the owner and a domain name registrar.

By Max Marbut

Computers have changed global business by allowing more data to be processed and stored in more places and accessed by more people than in any time in history. In some ways, the technology has created new commercial advantages. In other ways, it has created consequences, depending on the nature of the data, who has access to it and what they are able to do with that data.

Cases are appearing on the dockets of federal courts that, before the computer age, would have involved breaking and entering and burglary or at least leaving the office with a briefcase full of sensitive information that was intended to remain in-house.

In August, an Intel employee in Boston was indicted for theft of trade secrets. Three months later he was also indicted for wire fraud in connection with downloading confidential documents from the company's headquarters in California, where his wife worked.

To continue reading this interesting article from The Jacksonville's Financial News & Daily Record, click here.

By Ellen-Brown

In the last two weeks, two federal interest rates hit all-time record lows. On December 16, the market was taken by surprise when Fed Chairman Ben Bernanke lowered the federal funds rate (the interest banks pay to borrow the reserves they need to meet their reserve requirement) to zero. The explanation given was that the Federal Reserve was just setting the rate closer to where banks had already been trading with each other for weeks.

The biggest "trade secret" of the banking business is that banks create the money they lend out of thin air. "The process by which banks create money is so simple," wrote economist John Kenneth Galbraith, "that the mind is repelled." Banks simply write "credit" into an account in exchange for the borrower's promise to repay. In the case of the federal government, the bank that "monetizes" its promise to repay is the privately-owned Federal Reserve; and today the Fed is taking that monetizing power to such dangerous lengths that the currency could be hyperinflated into oblivion.

To continue reading this interesting article by opednews.com, click here.

By Brent Kendal

The FTC is seeking to undo Whole Foods' 2007 acquisition of rival Wild Oats Markets Inc., arguing that the merger would lessen competition in the market for natural and organic foods. The commission is holding an administrative trial in February on the legality of the merger.

Whole Foods said that no one inside its company would see the sensitive data, only its outside lawyers. The FTC, meanwhile, has put in place a protective order that bars unauthorized disclosure of trade secrets.

To continue reading this interesting story from CNN Money click here.

By Howard Mintz

A Santa Clara County jury on Monday ordered Pfizer to pay $38 million to a leading San Bruno medical research firm for stealing trade secrets to develop a pain relief drug that eventually was taken off the market.

Concluding a six-week trial, the Superior Court jury also found that Pfizer and a former employee of the research firm could be liable for punitive damages, which could triple the judgment and catapult the verdict beyond $100 million. Judge Gregory Ward, who presided over the trial, will eventually decide the punitive damage amount.

To continue reading this article from San Jose Mercury News please click here.

By Lee Howard

The verdict, after a six-week trial, found that Pfizer had conspired to steal trade secrets from the nonprofit Ischemia Research and Education Foundation of San Bruno, Calif., in an effort to develop the painkiller Bextra. The lawsuit alleged that Pfizer stole a database on cardiovascular risks associated with drugs like Bextra.

Bextra, co-developed by Pfizer and Pharmacia, was eventually pulled from the market because of cardiac concerns.

To continue reading this interesting story from theday.com click here.

The Foundation is awarding $10,000 Scholarships for Minority Scholars as well as arranging internships and mentorships to assist under-represented minority law school students entering intellectual property law.

Because of the central role intellectual property (patents, trademarks, trade secrets and copyrights) will have on the future of our country and the world, it is critical that the legal profession serving this strategic area strive mightily to reflect the rich diversity of our great nation. Therefore, the AIPLEF Board decided to take as one of its central missions, activities which would help to increase diversity in the IP bar.

The first initiative of the Foundation has been the establishment of the Sidney B. Williams, Jr. Intellectual Property Law Scholarships. The goal of these scholarships is to increase the numbe of under-represented minority groups serving as intellectual property law practitioners in law firms and the intellectual property law departments in corporations. Since April 2002, the AIPLEF has been awarding a number of $10,000 Scholarships for Minority Scholars as well as arranging internships and mentorships to assist under-represented minority law school students intending practice intellectual property law. The scholarships are named in honor of Sidney B. Williams, Jr. who was the first African-American to hold major leadership roles in both the AIPLA and the ABA-IPL Section and who has and continues to give countless hours and boundless energies to influence minority students looking for a future in science and engineering to pursue law school and intellectual property law. He is a role model for all young lawyers.

Over 300 companies have signed the following statement developed by Bell South Corporation Legal Department Diversity Committee and adopted by Minority Corporate Counsel Association.

44 Gonz. L. Rev. 81 (2008)
Sharon K. Sandeen

Anyone who has paid attention to developments in the world of business over the past quarter century knows that intellectual property ("IP") is a hot commodity. Indeed, in contrast to companies that emerged from the Industrial Revolution, many of the companies spawned during the Information Age attribute much of their value and prospects to intangible, rather than tangible, assets. Pursuant to IP theory, this shift in focus should have the desirable effect of encouraging more inventive and creative activity. From a practical point of view, it has created a situation where the value of a company can be more "smoke and mirrors" than real.
The ethereal nature of IP should be of particular concern to the parties to a bankruptcy proceeding because a principal focus in such cases is the identification and distribution of the assets of the debtor's estate. If, as some companies represent to their shareholders, creditors, and others, IP rights make up a major portion of a company's assets, then it is important for bankruptcy judges, trustees, and creditors to be able to identify, secure, and properly value such assets. Unfortunately, while bankruptcy courts and commentators have recognized the need to distinguish between tangible assets and IP rights, particularly when determining whether a claim against the bankruptcy estate is secured or unsecured, they often fail to acknowledge the practical and legal differences between the various forms of intellectual property. Not all forms of IP are created equal. For instance, while existing patent rights and pending patent applications are documented in writings that are available over the Internet, the same cannot be said for copyrights, trademarks, and trade secrets. Trade secrets, in particular, present a challenge for bankruptcy courts because they do not always exist in tangible form and, by definition, they must be kept secret. Thus, the very act of identifying and attempting to place a value on them may result in the loss of such rights.
A number of articles have addressed the treatment of IP assets in bankruptcy proceedings. [FN8] Typically, these articles focus on two important aspects of bankruptcy law as it relates to IP: (1) how to perfect a security interest in IP assets, i.e., "general intangibles" in the parlance of Article 9 of the Uniform Commercial Code (the "U.C.C."), and (2) the treatment of executory contracts involving IP assets. [FN9] Rather than focus on a discussion of security interests and executory contracts as they relate to trade secrets, this article takes a broader approach by examining additional trade secret related issues that may arise in a bankruptcy proceeding.
The analysis of how trade secrets are treated in bankruptcy begins in section II with a discussion of the intersection of bankruptcy and trade secret law. The article then explores the interests and objectives of the various players in a bankruptcy case. In order of involvement, section III examines the interests of the debtor. Next, in section IV, the interests of the bankruptcy trustee (including a debtor in possession) are discussed. [FN10] Given that the interests of the debtor and trustee may vary depending upon whether the bankruptcy petition is filed under chapter 7 (liquidation), [FN11] chapter 11 (reorganization), [FN12] or chapter 13 (individual), [FN13] the differing laws and rules applicable to each chapter are discussed where appropriate.
Beginning with section V, the article explores the interests of creditors and other third parties. Befitting their special status, section V focuses on secured creditors and addresses how to perfect security interests in trade secrets. Because bankruptcy debtors are often the licensors of trade secrets, section VI examines bankruptcy proceedings through the eyes of a licensee. It is in sections III and VI where the treatment of executory contracts involving trade secrets is discussed. As will be seen, *84 courts have yet to fully examine many of the issues concerning trade secrets that can arise in a bankruptcy proceeding.

Davida H. Isaacs
Northern Kentucky University - Salmon P. Chase College of Law

Robert Michael Farley
Patterson School of Diplomacy and International Commerce

Berkeley Technology Law Journal, Forthcoming

Abstract:
It is every inventor's nightmare: a valuable idea, stolen, with no legal recourse. Yet that is precisely what happened in Lucent v. Crater, where the Federal Circuit permitted the Federal Government to defeat the inventors' claims using the military and state secrets privilege. In light of the recent upsurge in the Government's invocation of this privilege, it is time to scrutinize more carefully courts' highly deferential response to its use. There is little question that the executive branch must be able to invoke the privilege in order to ensure that national security is not imperiled by public disclosure of information. But courts too often acquiesce in the complete suppression of that information. Unfortunately, in the context of claims regarding unauthorized military use of inventions, this extreme reaction has the potential to engender several serious problems.

First, as demonstrated in Crater, under some circumstances the suppression may disregard inventors' constitutional rights. Where the Government has misappropriated a trade secret, the owner has the constitutional right to compensation for that "taking." But suppression of the evidence needed to prove the owner's claim removes that constitutionally mandated remedy. Second, and equally problematic, the destruction of inventors' claims (whether patent or trade secret) may have a significant deterrent effect on companies' willingness to pursue inventions sought by the military. This effect is particularly troubling because it will fall disproportionately on smaller businesses, which directly conflicts with the Department of Defense's stated goal of increasing the proportion of defense technology that comes from smaller businesses. Such businesses must rely primarily on legal protection, rather than political or economic clout, to vindicate their intellectual property rights. If application of the privilege strips these inventors of that protection, they may be disinclined to focus on inventions of interest to the military. In essence, the nation's long-term defense strategy is being taken hostage by the Government's short-term litigation strategy.

Given these concerns, as well as courts' essential obligation to hear valid claims, it is incumbent upon courts to consider more carefully whether the circumstances of a particular case require the severe response seen in Crater. In many situations, courts could employ procedural mechanisms that would safeguard sensitive information yet still permit innovators to pursue their claims. Using these approaches, courts could protect sensitive information without forcing inventors to have to pay the price - literally and figuratively - for the Government's use of its privilege and without risking our nation's future security.

This case requires us to construe an exclusion barring coverage for "any claim
arising out of any misappropriation of trade secret" in a professional liability
policy issued by the defendant, National Union Fire Insurance Company of
Pittsburgh, Pennsylvania (National Union), to the plaintiff, Uniscribe
Professional Services, Inc. (Uniscribe). After settling a claim with a client from
whom sensitive documents were taken while in Uniscribe's care, Uniscribe commenced
an action seeking a declaratory judgment that National Union had a duty to defend
and indemnify Uniscribe for the settlement. National Union moved for
judgment on the pleadings, see Mass. R. Civ. P. 12(c), 365 Mass. 754 (1974),
arguing that its policy excluded claims arising out of the misappropriation of
trade secrets (intellectual property exclusion), wrongful acts committed with the
knowledge that it was a wrongful act (knowing wrongful acts exclusion) and
criminal acts (criminal acts exclusion). Uniscribe opposed National Union's motion
and moved for partial summary judgment

Welsh v. Big Ten Conference, Inc. (11/21/08)

The court granted in part and denied in part Big's motion to dismiss Welsh's amended complaint and request for attorney fees. Welsh's theory was that he owned the rights to certain trade secrets (namely the "Big Ten Network" and the business ideas it encompassed as described in Welsh's business plan) and that Big obtained its registration for the "Big Ten Network" mark by not telling the PTO that Welsh had rights in those trade secrets. Even assuming that Welsh established trade secrets to the name and associated concept, those rights did not automatically translate into trademark rights. Welsh could not assert a trademark right in his idea for the name or content of "Big Ten Network." Welsh's actions did not rise to the required level of "use" to trigger protection under the Lanham Act and did not give rise to a colorable claim of ownership of the mark that rendered Big's failure to disclose Welsh's prior use of the term a violation of the Lanham Act.

By Daniel Barlow
Times Argus Online

MONTPELIER - Some lawmakers are envisioning a future where Vermonters can type in a doctor's name into an on-line database and see exactly how much - if any - money they receive from the pharmaceutical industry.

For several years now, the Vermont Attorney General's Office has issued a report detailing the amount of money those in the medical field receive from the pharmaceutical industry. But that report is criticized for not being complete or user-friendly. Now, key lawmakers say they want to see changes to the law that set up that reporting system, including stripping a trade-secret exemption that allows the industry to keep secret the amounts of money and identities of doctors they give to.

By Dick Russ

John Blazy and his incredible works of art are making their way from his Parma workshop to all parts of the country. John, the founder and owner of John Blazy Designs, has invented and perfected the manufacture of what he calls "Dichrolam."

It is glass that splits light into ever-changing colors and patterns. It's like a combination prism, hologram, and kaleidoscope with 480 microlayers of translucent resin.

Indeed, John Blazy's trade secrets are well guarded and protected. His technique of placing a liquid resin between two sheets of glass and turning the finished product into an astonishing creation of color, is unique in the world.

To continue reading this interesting article from wkyc.com click here.

By Lee Howard

Pfizer Inc. has been ordered to pay at least $38 million - and may owe more than $100 million - to settle a California trade-secrets lawsuit, The San Jose Mercury News has reported.

The verdict, after a six-week trial, found that Pfizer had conspired to steal trade secrets from the nonprofit Ischemia Research and Education Foundation of San Bruno, Calif., in an effort to develop the painkiller Bextra. The lawsuit alleged that Pfizer stole a database on cardiovascular risks associated with drugs like Bextra.

Bextra, co-developed by Pfizer and Pharmacia, was eventually pulled from the market because of cardiac concerns.

To continue reading the complete article from theday.com click here.

Sun Editorial

In its mission to protect human health and the environment, the U.S. Environmental Protection Agency is supposed to act as a clearinghouse for information about hazardous chemicals.

However, an analysis by the Milwaukee Journal Sentinel found that the EPA is making it difficult for people to find information about chemicals and is allowing companies to keep compounds, including those shown to cause cancer and respiratory problems, secret.

It's not supposed to be that way. The EPA's chemical monitoring program was established 30 years ago to help the public steer clear of dangerous chemicals. Manufacturers are required to regularly file information about the hazardous chemicals they make. They are allowed to withhold information only in limited circumstances, including trade secrets but, when it comes to health and safety information, nothing is supposed to be secret.

To continue reading this interesting article from Las Vegas Sun click here.

By James B. Stewart (Author Archive)

Now that some of the dust is settling around the Bernard Madoff scandal -- he allegedly admitted to bilking his investors out of at least $50 billion -- there has been a growing tendency in some quarters to blame the victims, at least in part. According to these theories, they should have recognized that annual returns of around 10% in both good times and bad were too good to be true. They should have been suspicious of Madoff's vague explanations of how he arrived at those results. And to the extent he described his strategy, which involved the simultaneous purchase of stock and sale of option contracts, they should have noticed that there wasn't sufficient volume in those options trades to account for the reported gains.

The lesson from such criticisms, I suppose, is that we should all turn ourselves into forensic accountants. I find that preposterous, not to mention distasteful, given that some of these people have lost their life savings. After all, consistent returns in good and bad markets are the selling point for nearly every hedge fund. There are plenty that have reported much larger annual returns without raising eyebrows. Indeed, Madoff's returns were good, but not so spectacular as to raise undue suspicion. As for his vague explanations, they were no vaguer than those of many other hedge fund managers and even mutual fund managers. No one wants to give away his or her trade secrets. And as for the volume of trading in options contracts, what investor has the time for that kind of detective work, even assuming it might have revealed some irregularities?

To continue reading this interesting article from SmartMoney.com click here.