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Trade Secrets

Trade Secrets Image

Fish & Richardson uses its Litigation and Intellectual Property Expertise to Protect its Clients’ Most Important Trade Secrets.

Many companies consider their trade secrets to be even more important than their patents. Once a company’s trade secret is disclosed, its competitive advantage may be compromised. Fish takes swift action for its clients and has successfully protected their trade secrets through temporary restraining orders, preliminary injunctions, and even seizure orders. When in litigation—either protecting our clients’ trade secrets or defending a client from allegations of trade secret theft—our experienced litigation teams are adept at managing large, sophisticated cases. This often involves daunting amounts of discovery and proceedings in multiple venues, including civil lawsuits, criminal prosecutions, or regulatory scrutiny, oftentimes as parallel proceedings. Fish has more than 300 attorneys with degrees in science or technology, almost 90 of those with PhDs in their respective fields, who will understand your technology or business practice. Fish’s seasoned trial attorneys are skilled at leveraging this unparalleled expertise to distill complicated scientific, technical, and financially-sensitive trade secrets into compelling stories that persuade juries.

What is Trade Secret Litigation?

Trade secret litigation involves a company’s or individual’s most confidential technical, financial, or business information, which the company or individual considers its “trade secrets.” For example, the formula for Coca-Cola has been protected as a trade secret for over 100 years. Trade secret cases often involve a former employee who takes his or her former employer’s proprietary information and discloses it to his or her new employer, which is frequently a competitor. Or the case may involve two companies to a joint venture who exchange trade secrets under non-disclosure agreements, and one company later decides to go on its own while using the other company’s confidential information. In today’s digital age, trade secrets are increasingly stolen by malicious hacking into a competitor’s network infrastructure.

The biggest challenge for trade secret owners often is maintaining the secrecy of the trade secret. Once sensitive financial or business information is publicly disclosed, its value as a trade secret may be worthless. No amount of damages from a successful lawsuit may ever remedy the loss. For this reason, when trade secret theft is suspected, the owner must act expeditiously to obtain a temporary restraining order or preliminary injunctive relief to prevent the trade secret from being further exposed. Where the trade secret is kept electronically, Fish often requests the Court appoint a forensic examiner to investigate the extent of the theft. A swift preliminary investigation can form the basis to then request the Court to take action to seize or thwart any further dissemination.

For an accused misappropriator, or for an employer who is alleged to have hired an accused misappropriator, engaging a forensic expert and commissioning a thorough internal investigation may prove critical to gathering evidence and establishing defenses. In addition to potential civil liability, criminal exposure is a serious risk under federal statutes such as the Economic Espionage Act and the Computer Fraud and Abuse Act. Mounting a robust defense on both civil and criminal fronts simultaneously requires experienced counsel with a strategic eye toward favorable resolution.

Once in litigation, the case often centers on whether the alleged trade secrets actually qualify for protection, whether they were misappropriated, and whether the trade secret owner suffered damages from any misappropriation. To qualify for protection, trade secret owners must prove that they took reasonable steps to protect the confidentiality of their trade secrets, such as requiring non-disclosure agreements for anyone who works with the trade secrets, and limiting the distribution of the trade secrets to the smallest group necessary. Trade secret cases frequently involve expert witnesses, who testify on issues ranging from whether the proprietary information is a trade secret to whether a trade secret was stolen by unauthorized use of a computer to the value of trade secrets and damages for their theft.

Fish brings to the table an unparalleled ability to understand the issues that are subject to expert opinion.

Representative Examples of Fish Trade Secret Litigation Successes.

  • Chevron Phillips Chemical Company LP v. INEOS Group, Ltd., et al. Chevron Phillips Chemical Company (“CPChem”), one of the world’s leading petrochemical companies and top producers of polymers, including a plastic called polyethylene, came to us in 2005 to seek help with protecting its trade secrets, after learning that its competitor INEOS had improperly disclosed CPChem’s trade secrets to companies in China. CPChem owned trade secrets relating to a revolutionary process for manufacturing polyethylene developed in the 1950s called the loop slurry process, which its predecessor had invented and then licensed in exchange for express promises of perpetual confidentiality. INEOS became a successor to one of those licensees, and began licensing the technology to companies in China, in contravention of the confidentiality obligations. INEOS contended that CPChem’s technology was not protectable as trade secrets because it was over 50 years old and had been extensively patented. Despite the age of the technology and the fact that aspects of the technology were covered in numerous patents, Fish was able show the Texas District Court the trade-secret nature of the technology at issue and obtain a temporary injunction prohibiting INEOS from licensing the technology. The injunction was affirmed on appeal.
  • Airframe Systems, Inc. v. L-3 Communications Corp. Fish defended L-3, a major defense contractor, in a complex commercial dispute regarding software licensing and ownership that spanned three judicial fora and three federal appeals. A former software vendor, Airframe Systems Inc., accused L-3 of various misappropriation of trade secrets and copyright claims involving computer source code relating to aircraft maintenance tracking after L-3 decided to replace the vendor’s software with its own system developed in-house. Airframe claimed damages of $132 million. Fish won summary judgment in the District of Massachusetts in 2010, which counted among the largest defense wins for a software dispute that year. Fish also successfully defended its client and assisted its client’s government customer in the Court of Federal Claims, as well as in multiple appeals to the First Circuit, all resolving in favor of Fish’s client.
  • VRCompliance LLC v. HomeAway, Inc., et al. Fish represented the world’s largest online vacation rental marketplace in a computer trespass and data misappropriation case litigated simultaneously in in Federal District Court for the Eastern District of Virginia and state court in Travis County, Texas. At issue was a private contractor’s attempts to obtain HomeAway’s customer listings from HomeAway’s websites for aggregation, analysis, and sale to third parties. Fish filed the Texas state court misappropriation case on behalf of HomeAway just as HomeAway’s opponent filed the Virginia federal action. Fish won an immediate stay of the federal case and then argued an appeal that involved an unusual federalism question that was an issue of first impression in the Fourth Circuit. Fish won a unanimous affirmance of its favorable result for client HomeAway, which led to a confidential settlement.

Fish Experience in Confidential Trade Secrets Investigations.

  • Conducted an internal investigation for a Fortune 100 company regarding allegations of possible violations of the Economic Espionage Act and Computer Fraud and Abuse Act. The investigation concerned competitive business strategies and plans, proprietary marketing and pricing information, and sales training materials; it involved events occurring domestically and in several foreign countries.
  • Conducted an internal investigation for a leading biotech company regarding allegations that a company scientist had misappropriated biological materials from a former employer and was using the materials to conduct ongoing research in possible violation of the Economic Espionage Act.
  • Successfully represented a high-level corporate executive of a leading medical device company in an investigation conducted by the U.S. Attorney’s Office for the District of Massachusetts regarding alleged violations of the Economic Espionage Act pertaining to events occurring in several European countries.

Fish’s trade secret experience is complemented by our subject matter expertise, which has been honed over decades of excellence in intellectual property law. As the premier patent and high-profile, complex litigation practice in the nation, Fish has unparalleled depth and breadth of technical expertise, proven trial skills, and strong industry knowledge. Combining our depth of technical knowledge and our unique ability to make the complex understandable, Fish has unparalleled expertise in managing, conducting and winning trade secret cases.