By: Almelin , Snyder, Sapoznikow, McCollum and Weader
Originally published in the Gonzaga Law Review, March 2010

Economists estimate that IP in the U.S. is worth about $5 trillion, which is equivalent to almost half of the U.S. economy. There is little data on the exact value of trade secrets because trade secrets are, by definition, secret. Economists nonetheless estimate that trade secrets are a large and increasing percentage of IP. The theft of trade secrets is also big business, costing companies as much as $300 billion per year.

Despite the economic importance of trade secrets, trade secret law receives less scholarly attention than other major forms of IP, such as patents, copyrights and trademarks. One particularly significant gap in the trade secret literature is the dearth of empirical analysis. This article seeks to fill that void.

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BUSINESS WIRE

Deceuninck North America (DNA) sued the former vice president of its decking business and the deck manufacturing company he went to work for, Sensibuilt Building Solutions, for numerous claims including the misappropriation of trade secrets.

When DNA first learned that the former employee had gone to Sensibuilt, a forensics review of his work computer ultimately led to the discovery that he had downloaded more than 2,000 of DNA's most confidential documents onto a flash drive in the weeks just prior to departing the Company. During this process the employee also stripped many of those documents of data that would track their use and subsequently "wiped" clean his home computer's memory, further impairing discovery.

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The two Chinese employees of Rio Tinto will challenge their jail sentence after being convicted of bribery charges and stealing trade secrets.

According to their lawyers, Wang Yong and Liu Caiku were sentenced to prison for 14 and seven years respectively. Ge Minquiang have not yet decided to appeal his eight years of sentence.

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THE ASSOCIATED PRESS

AK Steel Holding Corp. has filed a lawsuit alleging three ex-employees of its Rockport, Ind., plant stole company trade secrets.

The lawsuit filed March 11 says Donald Earley resigned as a senior process engineer last year and accepted a job with ThyssenKrupp Steel USA.

The lawsuit claims Earley accessed confidential information and trade secrets from AK Steel's computer systems and contacted AK Steel employees Dona Ashby and Jonathan Salisbury for confidential information.

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"Deconstructing processors like the A4 usually happens behind the closed doors of only a handful of companies. These global reverse engineering firms are the investigative arm of the electronics marketplace, gumshoes who do research for people who need to find out who is making what circuitry, as well as what manufacturing process they're using to do it," iFixIt reports.

"They're the ones who delve deep into processors, audio controllers, and every other part you'd find inside a cell phone or iPad, figuring out layer by layer the exact composition of each package."

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After a bench trial, the district court entered judgment and ordered a permanent injunction against Byce, in favor of plaintiffappellee JustMed, Inc., Byce's former employer.

Among other things, the district court found that JustMed owns the software program used on its digital audio larynx device under the work-for-hire doctrine of the Federal Copyright Act, because Byce wrote the source code for the company as an employee, not as an independent contractor.

The district court also found that Byce misappropriated the software under the Idaho Trade Secrets Act. Byce appeals both rulings. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in part and reverse in part.

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By: Suzanne Bohan
Contra Costa Times

Jury selection began in a state courtroom in Hayward for a case alleging theft of trade secrets and breach of a nondisclosure agreement by Lawrence Livermore National Security, the corporation running the Livermore Lab under contract with the Department of Energy.

A lawsuit filed in April 2008 by a Bay Area inventor, Victor Kley, claims laboratory employees co-opted a process Kley invented for creating an extremely hard capsule made from high-density carbon, a type of diamond, for use in the fusion chamber of the National Ignition Facility.

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By: Michael Sainsbury
From: The Australian

ON the evening of June 9 last year, as an unusually long and pleasant Beijing spring was sliding into its hot and sticky, unpleasant summer, Stern Hu stepped out of the heat into the cool air of one of the Chinese capital's business hubs -- Shangri La's swanky China World Hotel.

The Rio Tinto executive, an Australian citizen, was there for the sort of ordinary business meeting company executives have with their customers.

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WINSTON-SALEM, N.C., April 15, 2010 /PRNewswire via COMTEX/ -- Krispy Kreme Doughnuts, Inc.

"During fiscal 2010, we made substantial progress in building a stronger foundation for our Company and improving our business model. We generated positive Company same store sales in all four quarters despite the difficult economy, while also delivering substantially higher operating income. In addition, we reduced our debt by over 40% during the year."

The Company ended fiscal 2010 with a total of 582 Krispy Kreme stores systemwide, a net increase of 59 locations since February 1, 2009. As of January 31, 2010, there were 83 Company stores and 499 franchise locations.

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Arthrex Inc. announced that it has filed a lawsuit in the U.S. District Court for the Middle District of Florida against Parcus Medical, LLC. The lawsuit alleges counts of misappropriation of Arthrex's trade secrets, tortious interference with contract, and tortious interference with business relationships, according to an Arthrex press release.

The company claims that Parcus Medical willfully misappropriated Arthrex's proprietary trade secret information. Arthrex further claims that Parcus Medical intentionally caused former Arthrex employees to breach their confidentiality agreements and wrongfully interfered with Arthrex's existing business relationships.

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By: Michael Van Sickler
Times Staff Writer

ST. PETERSBURG -- Six months after they persuaded the City Council to cede a public sidewalk in front of BayWalk, its managers still have no major tenants to announce at the nearly empty shopping and entertainment complex.

BayWalk lost another tenant last week when Trade Secret, a salon products merchant, moved out. That makes five tenants to close since the Oct. 15 vote that allowed BayWalk to shoo away loitering teens and protesters from the public sidewalk at the project's entrance.

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By TERI SFORZA

Samantha O'Neil, of the Census Bureau Public Information Office, told us. "We cannot provide detailed pricing information on promotion item costs because the information constitutes a trade secret of our main contractor -- DRAFT FCB."

As we fitfully prepared to file our Freedom of Information Act Request, we got a phone call from a good-humored man named Stephen L. Buckner. Buckner begged our pardon and proceeded to answer our questions.

The good news is that the U.S. Census Bureau did not spend $1 billion on swag! And that the public information we asked for is, indeed, public!

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By: Suzanne Bohan
Contra Costa Times

An Alameda County jury ruled in favor of Lawrence Livermore National Security, or LLNS, in a trial alleging it stole trade secrets from a Bay Area inventor, according to a statement released Monday.

An April 2008 lawsuit by Bay Area inventor Victor Kley alleged that laboratory employees co-opted a nanotechnology process Kley invented for creating an extremely hard diamond capsule that could be used in the fusion chamber of the National Ignition Facility. Specifically, Gary Gwilliam, the Oakland attorney representing Kley, asserted the lab engaged in theft of trade secrets and violations of a nondisclosure agreement.

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By: Gregg Keizer

Gizmodo, which posted photos today of what it said was the next-generation iPhone, paid $5,000 for access to the smartphone, said Nick Denton, head of Gawker Media, which publishes the blog.

Apple's attorneys have not contacted Gawker Media, Denton added. "No official communication, no," he said, leaving open the door to some other form of contact.

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Opinion L.A.
Los Angeles Times

New iPhone prototype -- cost the company $5,000 up front, which seemed like a bargain at the time. The money went to the unnamed person who supposedly found the phone at the Gourmet Haus Staudt in Redwood City, where an Apple engineer named Gray Powell reportedly left it. In return, Gizmodo drew a flood of visitors to a series of posts by blogger Jason Chen about the secrecy-shrouded device.

This case is unique, however, in that Gawker paid its source for someone else's property; had Chen not been a journalist, no doubt police could have arrested him for buying what's arguably a stolen good and compelled him to reveal his seller. But Chen's a journalist, and his iPhone seller is therefore a "source."

A month after the conviction of Australian citizen Stern Hu for taking kickbacks and stealing trade secrets, China has issued definitions of what constitutes commercial secrets.

The definitions, drawn up for China's hundreds of state-owned firms, are in line with a draft law that requires telecommunications and internet operators to give authorities access to information sent through their networks.

The draft is part of an effort to codify what is a secret in China after the trial of four Rio Tinto employees drew international attention to the country's vague secrets laws.

Regulations on commercial secrets issued by the State-Owned Assets Supervision and Administration Commission (SASAC) were dated March 25, the day after the trial of Rio Tinto's Shanghai-based iron ore managers.

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