Monthly Archives: May 2016

DTSA Cases Being Filed: Defend Trade Secrets Act 2016

Posted by: DTSALAW.Com and DefendTradeSecretsAct.Lawyer Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®). Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at hsneath@psmn.com or 412-288-4013. See Websites www.psmn.com or www.DTSALaw.com.

The new DTSA federal civil remedy statute is already generating lawsuits being filed in Federal Courts. Two suits were recently filed in the Southern District of Florida with jurisdiction being claimed pursuant to the Defend Trade Secrets Act 2016 (DTSA). One case was also filed in the Northern District of Texas. See links to the cases below. In each Florida case, the plaintiff not only claimed trade secret misappropriation under the DTSA, but also under the Florida UTSA state statute (FUTSA). The Texas case brings claims under DTSA and the TUTSA along with pendent state law claims. This may become the trend as the DTSA and state statutes modeled after the Uniform Trade Secret Act describe trade secrets and misappropriation somewhat differently and provide, in some cases, different remedies. The differences in “definitions” between DTSA and the UTSA are not major, but they may make a difference if either is left out of a complaint filed in federal court.  We will monitor this trend and post in the future on new filings.

Interestingly, while both Florida cases seek injunctive relief in the complaint’s claims for relief, neither docket shows the filing of a separate Motion for TRO, Preliminary Injunction or motion for other injunctive relief. The Dean case brings only trade secret misappropriation claims under the DTSA and the FUTSA state statute. The Bonamar case brings claims under DTSA and FUTSA and a number of pendent State Law claims that you would expect to see in an employment related, non-disclosure, breach of covenants/contract case. In the Texas case, the plaintiff has filed an emergency motion for TRO under both state and federal law and a hearing is set for May 26, 2016. The motion and brief are linked below. Here are links to the cases on our website.

Florida Cases: Bonamar v. Turkin and Supreme Crab ; Dean V. City of Miami Beach et al

Texas Case: UPS v. Thornburg (Complaint) ; UPS v. Thornburg (Emergency Motion for TRO) ; UPS v. Thornburg (Brief in Support of Motion for TRO)

Sneath, Henry 2012 headshot

Henry M. Sneath, Esq. 412-288-4013 hsneath@psmn.com

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Judge Determines That Star Trek Copyright Suit Against Fan Film Anaxar Can Proceed

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

Last week, Judge Klausner from the US District Court for the Central District of California denied a fan film producer’s motion to dismiss a copyright infringement lawsuit brought by Paramount Pictures and CBS Studio, which own the copyrights in the Star Trek franchise. The case present some interesting issues regarding the interplay between copyright holders and fans that attempt to create works inspired by or based off of more famous works. The case is pending in Los Angeles and is captioned Paramount Pictures Corp. v. Axanar Productions, Inc. (No. 2:15-cv-09938-RGK-E).

Background

Star Trek is one of the most successful science fiction creations of the last fifty years. Created by Gene Roddenberry and first aired on television in 1966, Star Trek chronicles the adventures of humans and aliens in the future as they venture through space. The original television series has spawned numerous feature Enterprisefilms and television series, in addition to creating a huge and devoted fan base. The fan base is noted, in particular, for recreating and reenacting characters and scenes from the franchise, as well as creating new works based on the characters and events portrayed in the television series and movies. This lawsuit arose out of one such effort by a group of fans to create a movie based on a scene from the original television series when Captain Kirk meets one of his heroes, Garth of Izar, and discusses Garth’s victory against the Klingons in the battle of Axanar. Defendants created a script, received funding through various sources, and released a short film based on the Battle of Axanar that is a preview of their anticipated longer film. Plaintiffs filed suit claiming that Defendants’ efforts violated numerous copyrights that they own in the Star Trek franchise.

Plaintiffs’ Amended Complaint

In plaintiffs’ amended complaint, they set forth numerous examples of what they contend are infringing features or elements of defendants’ work, which include such things as various characters, alien races, costumes, settings, starships, logos, plot points, dialogue, and themes, some of which are shown below (Anaxar on the left, and plaintiffs’ on the right).

Uniform Comparison

Klingon Comparison

Starship Comparison

Defendants’ Motion to Dismiss

Defendants moved to dismiss the lawsuit on various grounds–that plaintiffs had failed to provide sufficient notice of what actions constituted infringement, that Paramount lacked standing to sue, that the allegations were not sufficient under the Twombly standard, that the various elements identified by plaintiffs were not protectable, that the claims were premature because the film had not been released, and that plaintiffs’ efforts amount to impermissible prior restraint.

Klingon Ship Comparison

The Court rejected all of these arguments at this procedural stage, noting (with a nod to the Star Trek franchise) that “[a]lthough the Court declines to address whether Plaintiffs’ Claims will prosper at this time, the Court does find Plaintiffs’ claims will live long enough to survive Defendants’ Motion to Dismiss.”

Klingon Amicus Brief

One of the more interesting aspects to this case was an amicus brief filed by the Language Creation Society. In its amended complaint, plaintiffs asserted that the Klingon language itself was protected by copyright. The Language Creation Society argued that the copyright laws do not protect a language itself. The Judge did not address this point in the opinion on the motion to dismiss, but this issue is an interesting one presented in a novel form. The amicus brief is a particularly good read, as it is interspersed with quotes and phrases in the Klingon language.Klingon Quote

Conclusion

The case is far from over, but it is an interesting window into the difficulties (both legal and otherwise) that a successful copyright owner faces in trying to creatively and economically control its works.

 

Defend Trade Secrets Act (DTSA) Seminar in Pittsburgh Jun 22, 2016

Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®). Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

See copy of my Tweet from earlier today: “I’m pleased to be a part of the Federal Bar Association seminar set for Pittsburgh on the new Defend Trade Secrets Act  https://twitter.com/hashtag/DTSA?src=hash   on June 22, 2016. Co-Hosted by the Pittsburgh Intellectual Property Law Association (PIPLA) and the Duquesne University School of Law, where I teach Trade Secret Law as an adjunct Professor of Law. Register at FBA link: http://tinyurl.com/gm8nudj and see my Tweet at
https://twitter.com/PicadioSneath/status/730450574148149248
This is biggest Federal expansion of  #IP  Law since the Lanham Act and when signed by the President (today it appears) – it will provide immediate jurisdiction for  #tradesecret  actions in Federal Court.”

Big IP NEWS: Defend Trade Secrets Act 2016 (DTSA) Passes Congress – President to sign

EnrolledTitle_114Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®). Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

The US Congress has passed the landmark Defend Trade Secrets Act of 2016 (DTSA) and it is set for the President’s signature. It will soon be law. See Link to DTSA Legislation here: https://www.congress.gov/bill/114th-congress/senate-bill/1890/text    Trade Secret law has long been the province of the States, more or less exclusively, and except for criminal protections against trade secret theft and economic espionage, there has been no Federal civil law providing a federal damages remedy for such theft.  Amended will be Crimes and Criminal Procedures – Title 18, Chapter 90, Section 1836 and the key provision is as follows:

“(1) IN GENERAL.—An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”

Congress has now added a civil remedy provision to Federal protection of Trade Secrets wherein prior Federal law only provided criminal sanctions. This has been described as a major new development in Federal IP law and will provide federal jurisdiction for Trade Secret Misappropriation cases. The law will NOT preempt nor change State laws and therefore actions will be brought in both federal and state court jurisdictions. Most states (48) have adopted a form of the Uniform Trade Secrets Act (UTSA) and actions can still be brought under those state statutes, but those statutes vary to some degree. The DTSA is very similar to the UTSA based state court statutes, but there will be differences depending on the state jurisdiction from which cases are brought or removed. DTSA will apply to any acts of trade secret misappropriation that take place AFTER the act is signed into law (not retroactive). The Statute of Limitations will be 3 years according to the actual text linked above, but some commentators have stated that it is 5 years (we will need to check to get accurate information on the SOL and will follow up).

The DTSA contains an important and somewhat controversial “Civil Seizure” provision which renders it different from most state laws and which reads:

“(i) APPLICATION.—Based on an affidavit or verified complaint satisfying the requirements of this paragraph, the court may, upon ex parte application but only in extraordinary circumstances, issue an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.”

This provision is controversial because it can be ordered by a court ex-parte. By amendment, the words “but only in extraordinary circumstances” were added to attempt to mollify some critics of this provision. However, there are some strict limitations to the ex-parte injunctions and a couple of them are below:

“(ii) REQUIREMENTS FOR ISSUING ORDER.—The court may not grant an application under clause (i) unless the court finds that it clearly appears from specific facts that—

“(I) an order issued pursuant to Rule 65 of the Federal Rules of Civil Procedure or another form of equitable relief would be inadequate to achieve the purpose of this paragraph because the party to which the order would be issued would evade, avoid, or otherwise not comply with such an order;

“(II) an immediate and irreparable injury will occur if such seizure is not ordered.”

Such ex-parte injunctions must be very specific and the court must go to great lengths not to overreach or to punish through publicity an accused wrongdoer during the period of seizure. There are other typical requirements for injunctions like posting of security and careful management of the seized materials, and the accused wrongdoer has a right of action back against the claimant if the seizure turns out to be wrongful or excessive.

In an action for misappropriation, a court may order injunctive relief and may

“(B) award—

“(i) (I) damages for actual loss caused by the misappropriation of the trade secret; and

“(II) damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; or

“(ii) in lieu of damages measured by any other methods, the damages caused by the misappropriation measured by imposition of liability for a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret;

“(C) if the trade secret is willfully and maliciously misappropriated, award exemplary damages in an amount not more than 2 times the amount of the damages awarded under subparagraph (B); and

“(D) if a claim of the misappropriation is made in bad faith, which may be established by circumstantial evidence, a motion to terminate an injunction is made or opposed in bad faith, or the trade secret was willfully and maliciously misappropriated, award reasonable attorney’s fees to the prevailing party.”

It is unclear as to how this bill will be enforced against foreign Trade Secret theft, or if there will even be jurisdiction under this act for such claims. We will follow up on that issue in future posts. See the Senate and House reports below which contain a substantial amount of background legislative history and commentary. Contact us for additional information. We will continue to study this new law and report to our readers.

Here is a link to the US Senate report on the bill: https://www.congress.gov/congressional-report/114th-congress/senate-report/220/1

Here is a link to the US House report on the bill: https://www.congress.gov/congressional-report/114th-congress/house-report/529/1

Sneath, Henry 2012 headshot

Henry M. Sneath, Esquire – 412-288-4013 or hsneath@psmn.com

Follow me on Twitter @picadiosneath and on Google+: http://tinyurl.com/ktfwrah