Posted 9 hours ago

Once You’ve Made Your Restrictive Covenant Bed You Must Lie Upon It…

The traditional approach taken by the English Courts to restrictive covenants was confirmed in the decision of the Court of Appeal in Prophet plc v Huggett [2014] EWCA Civ 1013. The Court of Appeal overturned a High Court judge’s decision that the words “or similar thereto” should be added to the relevant clause in order for it to make commercial sense and the injunction against the employee was disregarded.

Posted 1 day ago

There Are Many Ways to Milk a Cow and Not All Are Protected Trade Secrets

A consultant of a company entered into a consulting agreement with a competitor. The scope of his consultancy of the first company involved dairy-permeate processing systems and the second involved lactose-processing systems. The Court of Appeals of Minnesota found that these businesses were sufficiently distinct such that disclosure of information regarding one business would not violate the non-compete agreement prohibiting the disclosure of information regarding the other. The Court also drew a distinction between confidential information and trade secrets.

Posted 3 days ago

Eighth Circuit Affirms $31.1 Million Dollar Jury Verdict in Favor of Hallmark Cards over Private Equity Firm

In Hallmark Cards Inc. v. Monitor Clipper Partners LLC et al., 2014 WL 3409953 (8th Cir. July 15, 2014), the U.S. Court of Appeals for the Eighth Circuit affirmed a $31.3 million dollar jury verdict, which included $10 million in punitive damages, in favor of Hallmark Cards, Inc. (“Hallmark”) against a private equity firm known as Monitor Clipper Partners LLC, which was found to have misappropriated confidential information from Hallmark, including data from PowerPoint presentations. Hallmark’s Power Point presentations were also found to constitute trade secrets under the Missouri Uniform Trade Secrets Act (Mo. Rev. Stat. 417.450 et seq.).

Posted 1 week ago

Preliminary Injunction Entered After Texas Federal Court Concludes That Ex-Employee “Inevitably” Will Disclose His Former Employer’s Trade Secrets

An employee entered into non-compete and confidentiality agreements with his employer. Following his resignation from that company, he went to work for a competitor. His job functions and territory with both employers were similar. In a suit for violation of the non-compete and confidentiality agreements, a Texas federal court held recently that — absent an injunction — disclosure to his new employer of his former employer’s confidential information was inevitable. The court concluded that all of the prerequisites were met for a preliminary injunction. Brink’s Inc. v. Patrick, Case No. 3:14-cv-775-B (N.D. Tex., 6/26/14).

Posted 1 week ago

Trading Secrets Readers: Cast Your Vote in the ABA’s 100 Best Legal Blogs Competition!

Voting is open for the American Bar Association’s Annual 100 Best Legal Blogs competition. You helped us get named to the list in 2013, and we hope you will cast your vote today to help keep Seyfarth’s Trading Secrets blog on the ABA’s list for 2014.

Posted 1 week ago

Seyfarth Offers 2014-2015 Edition of 50 State Desktop Reference: What Employers Need to Know About Non-Compete and Trade Secrets Law

Seyfarth’s Trade Secrets, Computer Fraud & Non-Competes Practice Group has created a one-stop Desktop Reference surveying many of the questions related to the use of employee covenants and intellectual capital protection in all fifty states. For the company executive, in-house counsel or HR professional, we hope that this booklet will provide a starting point to answer your questions about protecting your company’s most valuable and confidential assets.

Posted 2 weeks ago

$16 Million Awarded By Arbitrator Against 50 Cent in Trade Secret Spat

In a case out of Florida involving the rapper known as “50 Cent” an arbitrator found the rapper liable for trade secret misappropriation, among other claims, in the creation of his own line of headphones. The arbitrator awarded, the plaintiff in the case, Sleek Audio, LLC, a little over $11.5 million in damages. Attorney’s fees were also awarded to Sleek and two other individual plaintiffs in the amount of nearly $4.5 million.

Posted 2 weeks ago

Texas Federal Court Imposes Ongoing Royalty Rather Than Permanent Injunction Against Alleged Trade Secret Misappropriator

A Texas federal trial court, finding the absence of any legal precedence to award an ongoing royalty in a trade secret misappropriation case, looked to the patent laws to impose an ongoing royalty. As a result, rather than permanently enjoining the misappropriator from continuing, the trial court imposed a royalty, thereby allowing the victim some compensation but allowing the other party to continue its activities.

Posted 2 weeks ago

Eleventh Circuit Affirms Alabama Federal Court Ruling that Non-Compete Signed Prior to Employment is Void

A few months ago, we reported on a federal court decision in the Southern District of Alabama declining to enforce a non-compete and non-solicitation agreement against a former employee who executed the agreement before he began his employment. Last week, a panel of the Eleventh Circuit affirmed the District Court’s decision in an unpublished opinion.

Posted 3 weeks ago

Florida Court Finds That Employer Without Knowledge That Employees It Just Hired Have Non-Competes Are Not Liable For Tortious Interference With Contract

A defendant company was unaware, when it hired two individuals, that they had entered into non-competition agreements with their prior employer. As a result, according to a Florida federal court, the prior employer did not have a valid cause of action against the new employer for intentionally interfering with those non-compete obligations.