By Dave Greber

A local company has filed a lawsuit against two of its former employees, saying the men are benefiting financially from trade secrets they stole from their former employer.

Rite Track, located at 8655 Rite Track Way, manufactures track equipment used in the photolithography and cleaning processes for the semiconductor industry, according to its Web site. The company's methods are used to produce certain types of electrical chips in computers, cell phones, solar panels and printers, for example.

The company says the two men are illegally using software designed by Rite Track to operate their own equipment, the lawsuit says. Company officials are seeking unspecified damages.

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By JOE NOCERA
Executive Suite

It is a simple enough question: who bought the credit default swaps that American International Group sold during the housing bubble? And at this point -- after Bailout No. 4, with the government handing A.I.G. another $30 billion to go with the previous $150 billion -- you would think that the taxpayers would have the right to know that information. Is it Goldman? Royal Bank of Scotland? The Irish banks that are on the verge of collapse? What happened to all that transparency the new administration keeps talking about?

The answer, as I understand it, is that A.I.G. views these as "confidential transactions," and the government (as per usual?) is going along with that rationale. One government official told me that if the federal government divulged the names of the counterparties it would amount to a violation of the Trade Secrets Act -- unless the counterparties agreed to it, which they never will.

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By Tom Harvey
The Salt Lake Tribune

A Utah enterprise that is seeking to develop nuclear-powered space tugs for use in Earth's orbit has lost a lawsuit against three former associates accused of misusing company secrets.

The lawsuits and counterclaims revolve around an ambitious plan by the North Salt Lake company to develop nuclear-powered tugs to haul satellites or power them in space.

In 2007, Iostar sued former company board member and president James Stuart, potential investor George French and former client Richard Busch. The lawsuit alleged that after French terminated his agreement to invest, the three conspired to plan a competing company using Iostar's trade secrets.

St. Louis Business Journal

Enterprise Rent-A-Car said Tuesday it plans to buy certain assets of Advantage Rent-A-Car out of bankruptcy for $19 million.

The deal gives Enterprise the ability to close or continue to operate any of Advantage's rental car facilities.

Enterprise could also take ownership of the right to lease all or part of Advantage's rental vehicle fleet; access to customer lists; Web address; corporate accounts; Yellow Pages advertising; and trade secrets, Enterprise said.

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By Mark Pittman
Bloomberg

The Federal Reserve Board of Governors receives daily reports on loans to banks and securities firms, the institution said in response to a Freedom of Information Act lawsuit filed by Bloomberg News.

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast "a stigma" on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

The Board of Governors contends that it's separate from its member banks, including the Federal Reserve Bank of New York which runs the lending programs. Most documents relevant to the Bloomberg suit are at the Federal Reserve Bank of New York, which isn't subject to FOIA law, according to the Fed. The Board of Governors has 231 pages of documents, which it is denying access to under an exemption under trade secrets.

The Associated Press

Two Tennessee engineers have been charged with stealing trade secrets from Goodyear Tire Co. to help design manufacturing equipment for a Chinese tire company.

Clark Alan Roberts and Sean Edward Howley pleaded not guilty Friday before a federal magistrate in Knoxville to an unsealed 12-count indictment charging trade secret theft, wire fraud and conspiracy.

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Zrii, LLC announced today that on February 27, 2009, Zrii, LLC filed a lawsuit against Lifevantage Corporation (a publicly traded company headquartered in San Diego, CA) for allegedly inducing and conspiring with the former Zrii executive management team and some of its leading Independent Executives to breach their contracts with Zrii, to join Lifevantage as its employees or distributors, and to utilize trade secrets of Zrii for the benefit of Lifevantage. The lawsuit was filed in the United States District Court in the Southern District of California (Ref. #:09 CV 0405 L). Zrii alleges and is seeking damages in excess of $250 million.

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Trading Markets

An indictment was unsealed today charging Clark Alan Roberts, 46, and Sean Edward Howley, 38, both engineers with Wyko Tire Technology Inc., located in Greenback, Tenn., with conspiring to steal trade secrets from the Goodyear Tire and Rubber Company and scheming to defraud Goodyear of confidential and proprietary information, announced Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the Eastern District of Tennessee James R. Dedrick.

According to the indictment, returned on March 3, 2009, Wyko secured a contract in early 2007 with the Haohau South China Guilin Rubber Company Limited (HHSC), a Chinese tire manufacturing company located in Guilin, Peoples Republic of China, to supply tire manufacturing equipment for use in producing large "off the road" (OTR) tires.

By: Marc Ostrowski

Authentec Theft Disclosed in Lawsuit's Legal Discovery Process.

Atrua Technologies announced today that it has asked the United States District Court to issue an injunction against Authentec, Inc. (NASDAQ: AUTH) due to their misappropriation of Atrua's trade secrets from facilities of prospective customers on multiple occasions. Information about the trade secret theft came to light recently in the course of the legal discovery process in ongoing patent disputes between the companies.

"We are very concerned that the competitive process has been and will continue to be seriously compromised," commented Anthony Gioeli on behalf of Atrua. "Atrua is committed to taking whatever steps we can to ensure that competition will be fair and that our technology will not be taken by our competitors.

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By: Jan Biles

A Manhattan electronics design and manufacturing company has been awarded nearly $17.5 million in actual and punitive damages in a lawsuit alleging breach of contract, fraud, fraudulent concealment and misappropriation of trade secrets after a deal with a French company to make a propeller deicing system dissolved.

Randy O'Boyle, president and CEO of ICE Corp.in Manhattan, said he learned of the verdict today. The case went to trial in early February at the Frank Carlson Federal Building, with U.S. District Judge Julie Robinson presiding.

"We were successful," O'Boyle said. "More than anything it means the big companies of the world can't get away with mistreating the smaller companies."

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By: Cyrus Sanati and Peter Edmonston

Just how much of a secret are Merrill Lynch's bonus numbers?

In 1979, the New York State Supreme Court ruled that Carvel did not need to turn its secret formula over to the New York State attorney general's office, which was investigating restraint-of-trade allegations at Carvel.

That was the comparison that Bank of America's lawyers made Friday morning in a New York courtroom, as they tried to persuade a judge to let them keep private the investment bank's information about its top-earning employees.

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By Tim Wilson

Two Wyko Tire Technology engineers are facing up to 150 years in prison after allegedly scamming their way into a Goodyear tire factory and secretly photographing its proprietary equipment.

According to a UPI report, in early 2007 Wyko secured a contract to supply the Haohau South China Guilin Rubber Co. with tire manufacturing equipment, the U.S. Department of Justice said in a statement.

In May of that year, Wyko engineers Sean Howley and Clark Roberts allegedly visited a Goodyear Tire & Rubber Co. plant in Topeka, Kan., under false pretenses. During the visit the pair "used a cell phone to surreptitiously photograph proprietary [off-the-road] tire manufacturing equipment," the DoJ said.

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BY MY-LY NGUYEN
Pressconnects

Endicott Interconnect Technologies announced this week that it celebrated its advancements in technological innovation with an awards ceremony Feb. 20 at The McKinley in Endicott.

EI honored 43 employees for patent applications filed, U.S. patents issued and trade secrets received last year. There were five trade secrets and 21 patents issued last year, Chief Technology Officer Voya Markovich said.

"We are not known as a former IBM company," he said. "We are known as Endicott Interconnect, a very advanced technology company."

By: Evan Halper

Under a new state law, beverages such as Smirnoff Ice are supposed to be taxed as liquor. But manufacturers say they've changed their recipes to continue fitting into the lower-taxed beer category.

Beverage makers admit they aren't paying the new taxes. They say they don't have to because they have reformulated the drinks -- more than 6,000 varieties -- to transform them into simple beers by limiting the amount of distilled spirits they contain.

They won't explain how. The formulas, they say, are trade secrets. And beverage-industry officials and federal regulators say there are no tests to determine how much distilled spirits the drinks contain.

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By Ray Hanania

The US has FTAs with 20 foreign nations, including six added in 2006, Bahrain, El Salvador, Guatemala, Honduras, Morocco, and Nicaragua. Israel lobbied for a bilateral Free Trade Agreement with the US in 1984 and it was approved in 1985. But since then, according to a study conducted by the Washington DC based Institute for Research: Middle East Policy (IRmep) of documents released only last year, the United States has lost more than $71 billion in the deal and the equivalent of an average of 100,000 jobs in each of the past 10 years alone.

This is a staggering discovery considering that the United States is today in one of the worst economic depressions in its history and that the American unemployment rate continues to rise, now past 8.2 percent nationwide.

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A former Brighton man was indicted Thursday by a federal grand jury on charges of wire fraud, theft of trade secrets from a Livonia company and false statements.

Thomas McKinney, 38, of Spring, Texas, was arrested near Houston by federal agents, said U.S. Attorney Terrence Berg. The indictment charges that in 2005, McKinney, while employed by Harland Robertson Co. of Livonia, stole its trade secrets and intellectual property and went to work at a new company. McKinney stole blueprints and drawings for chucks which Harland Robertson manufactured for sale to the automotive industry and similar companies, Berg said.

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UPI.com

U.S. Food and Drug Administration Deputy Commissioner Frank Torti is warning employees against leaking companies' trade secrets, a memo indicates.
Torti's memo, which was obtained by the In Vivo blog, outlined prohibitions against leaking commercial information that "can result in disciplinary sanctions and/or individual criminal liability," The Wall Street Journal reported Wednesday.

Torti goes on to include "internal memoranda, letters, and e-mail to and from employees within FDA" in the ban, encompassing such items as drafts of policymaking documents, draft notices of proposed and final rules and drafts of other Federal Register documents, the newspaper said.

By CHET BROKAW
Associated Press

Gov. Mike Rounds announced Thursday he has signed into law a measure that presumes government documents in South Dakota are public unless there's a good reason to keep them secret.

The new law starts with a presumption that records are open to public inspection. It then closely follows laws in other states to list the kinds of records that must be kept confidential.

Such records include medical and financial information about people, student records, trade secrets, university research secrets and security information that would endanger the public if released.

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By Jeff Smykil

Psystar has updated its line of Mac clones, completely disregarding the pending lawsuit by Apple for violations of the Mac OS X EULA. Still, the new addition offers more power for the same price as a Mac mini.

The introduction of the updated model certainly sends a message to Apple--one that would cause our mouths to be washed out with soap if we repeated. Apple, of course, filed a lawsuit against Psystar last summer for violations of the Mac OS X EULA. So far, the court case hasn't started, though the companies have recently agreed to keep their trade secrets, well, secret.

To read the complete article from Ars Technica, click here.

By Ellen Messmer

Software engineer Hanjuan Jin is accused of stealing thousands of confidential documents from Motorola

Did software engineer Hanjuan Jin, who worked at Motorola for about eight years, steal thousands of confidential and proprietary technical documents to share with competitor Lemko and the People's Republic of China?

Jin, in her late 30s, says she didn't. But U.S. federal prosecutors are going after her for allegedly sharing technical and highly-sensitive trade secrets to benefit a "foreign government, namely the People's Republic of China, specifically its military," according to the Dec. 9, 2008, indictment filed by federal prosecutors in Chicago.

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By: BILL HETHERMAN

A judge's removal of Sylvester Stallone and another man from a lawsuit alleging they misappropriated trade secrets in marketing a unique pudding for bodybuilders was a recipe for reversal, an appellate panel has ruled.

The three-justice panel of the 2nd District Court of Appeal unanimously agreed that Los Angeles Superior Court Judge William F. Highberger erred when he dismissed Stallone and John Arnold as defendants in the lawsuit brought by William Brescia, who created the high-protein, low-carbohydrate dessert.

Stallone and Arnold maintained that the proof is in the pudding itself; namely, that there was nothing special about it and that Brescia's legal team did not show how it differs from the general knowledge of those in the same field as the plaintiff.

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By: Jon Chesto
The Patriot Ledger

Telecom alleges employee leaks cost it hundreds of thousands of dollars.

A fast-growing Quincy telecom firm has sued one of its former employees, alleging that the sales representative leaked confidential client data costing the company hundreds of thousands of dollars in lost revenue.

Granite Telecommunications filed a complaint in Boston federal court last week against Stephen Levee, a former employee in Granite's Atlanta office who was fired last month, and Telesource Consulting LLC, a firm that Granite claims was using the information to divert existing and potential customers away from Granite.

PRNewswire

Calling for truth, rather than secrecy, to be the legacy of the tragic events of September 11, 2001, attorneys for a group of 9/11 family members are presenting oral arguments today urging U.S. District Judge Alvin K. Hellerstein to release more than one hundred deposition transcripts and over a million pages of evidence relating to the aviation security failures resulting in the worst terrorist attack in American history.

In hearings being held in the September 11th litigation against the aviation industry, the families are arguing that public disclosure of these materials, which the defendants are trying to keep confidential, will strengthen our security and provide the public with vital information without compromising the defendants' proprietary interests.

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By: Alfred Webre

Thus far, the U.S. appears to be a lone holdout among major UFO/ET-knowledgeable nations on any updated release of its secret files related to unidentified flying objects (UFOs) and extraterrestrial life.

Many reasons have been postulated for this refusal by United States military intelligence to release its secret UFO and extraterrestrial-related files. These range from national security, to a desire to retain a monopoly to secret governmental-extraterrestrial liaison programs, to a desire to maintain a monopoly on ET-derived fuel-less non-polluting energy sources, to a desire to maintain a corporate monopoly on ET-derived trade secrets.

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Associated Press

A suburban Chicago chemist is charged with stealing trade secrets from a Minneapolis-based paint manufacturer where he worked and planning to take them to a job with a foreign rival.

David Yen Lee of Arlington Heights was arrested Thursday after FBI agents found trade secrets on a thumb drive in his luggage as he prepared to catch a flight to Shanghai.

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By Kristen Kridel | Tribune reporter

An Arlington Heights man was charged Friday with the theft of trade secrets from the Wheeling company where he worked, authorities said.

David Yen Lee, 52, of the 400 block of West Rand Road, was arrested at his home Thursday and ordered held without bail Friday in federal court in Chicago, the FBI said. He faces up to 10 years in prison if convicted of the felony offense.

Lee, a naturalized U.S. citizen, worked for Minneapolis-based Valspar Corp., a maker of paints and industrial coatings. Lee, former technical director of new product development for Valspar's architectural group, quit March 16--two weeks after returning from a business trip to China, the FBI said.

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By: Mike Sclafani
HealthSport, Inc.

HealthSport, Inc. (OTCBB:HSPO) announced today that Shaquille O'Neal, perennial NBA All-Star and named one of the NBA's 50 Greatest Players of All Time, has reached an agreement with Enlyten, LLC, becoming its leading -- and most celebrated -- spokesman endorsing Enlyten's bi-layered nutraceutical film strips. Enlyten's nutraceutical strips are manufactured exclusively by InnoZen, Inc., a wholly-owned subsidiary of HealthSport, Inc. using HealthSport's patent pending proprietary strip technology which is one of the fastest delivery methods to the body barring the use of an IV.

InnoZen has five patents pending and has developed numerous trade secrets which it incorporates in the development and manufacturing process of edible film strips.

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The Editor interviews John F. Sopko , Partner in Akin Gump's Washington, DC, office, who has 20 years of experience in conducting congressional investigations in both the U.S. Senate and the House of Representatives.

Editor: Can trade secrets be protected? What about the attorney-client privilege?

Sopko: The courts have ruled that Congress does not have to recognize these privileges, but they can be protected, particularly if you know how to negotiate with the committee members and their staff. Most congressional members and staff with whom I've dealt recognize the importance of those privileges and do not want to harm a company by needlessly releasing trade secrets. However, as in most matters with congressional oversight, these things must be negotiated on a case-by-case basis.

To read the complete article from The Metropolitan Corporate Counsil, click here.