Author Archives: Henry Sneath

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 Houston Harbaugh, P.C.  www.hh-law.com. 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 sneathhm@hh-law.com or 412-288-4013. See Websites www.hh-law.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)

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

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

 

 

VENUE: Will Texas Lose its Dominance as a Patent Venue? Fed. Circuit Tackles Venue in the “Heartland” Case

 

FEDERAL CIRCUIT HEARS ORAL ARGUMENT IN “HEARTLAND” CASE ON MAJOR VENUE ISSUE

Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Group at Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®) in Pittsburgh, Pa. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

Federal CircuitYesterday the Federal Circuit heard oral argument on the mandamus petition filed by TC Heartland in an underlying case lodged in the District Court of Delaware ( The underlying case is Kraft Foods Group Brands LLC v. TC Heartland LLC, case number 1:14-cv-00028, in the U.S. District Court for the District of Delaware). The outcome could either keep the status quo where Texas is the venue of choice for an inordinately large number of patent infringement filings, or force courts to adopt a different standard for evaluating proper venue. Texas, Delaware and the Northern District of California receive the majority of patent case filings, but Texas gets over 40% of all filings alone. Heartland, as sued by Kraft Foods, is headquartered in Indiana and believes that the case should be lodged in their home jurisdiction and not where they have little or no business contact in Delaware – beyond sales of product. On a challenge to venue, the District Court used the currently applied standard finding “venue is appropriate for a defendant in a patent infringement case where personal jurisdiction exists.” Heartland argues that the Federal Courts Jurisdiction and Venue Clarification Act of 2011 effectively repealed the Federal Circuit’s 1990 ruling in VE Holding v. Johnson Gas Appliance that patent suits can be brought anywhere a defendant makes sales. In other words, that personal jurisdiction and venue are essentially the same. Heartland, in its mandamus petition ( https://www.eff.org/files/2015/10/28/in_re_tc_heartland.pdf ) has asked the Federal Circuit to reevaluate the VE Holding case along with certain Congressional venue legislation and the overall venue issue.

Here are a couple of resources to assist you in following this case. The great blog at Patently-O has written on Heartland: http://patentlyo.com/patent/2015/10/defendant-jurisdictional-infringement.html

See also a fascinating study of what would happen to patent case filings if the Federal Circuit changed the venue standard: From Patently-O: Guest Post: What Would Happen to Patent Cases if They Couldn’t all be Filed in Texas? March 11, 2016 PatentJasonRantanen by Colleen Chien, Santa Clara University Law School and Michael Risch, Villanova University Charles Widger School of Law

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Huge CMU v. Marvell Patent Infringement Case Settled in Pittsburgh

 

Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Group at Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®) in Pittsburgh, Pa. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

marvell_chipFrom “ars technica“* publication: One of the largest patent verdict cases ever was obtained by Carnegie Mellon University (CMU) in Pittsburgh Federal District Court in 2012 in the courtroom of the Hon. Nora Barry Fischer as presiding judge. CMU won a $1.17 billion jury verdict in 2012 and the court enhanced the verdict to $1.54 Billion.  The Federal Circuit cut the win significantly, by reducing the damages and eliminating the enhanced damages award, but kept the main verdict intact. The case was just settled here in Pittsburgh for $750 Million. It will allegedly be the second largest payment ever in a technology patent case. A thorough article on the matter with good links to the case history appears at web publication ars technica*(http://tinyurl.com/zwb26wg ).

*ars technica is a copyrighted publication and the references and links herein are from the website of ars technica (© Ars Technica 1998-2016)

Henry M. Sneath

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Pittsburgh Court Rules on Data Breach Class Claims – Denying Cause of Action

Posted By Henry M. Sneath, Chair of the Cybersecurity and Data Breach Prevention and Response Team at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C.  hsneath@psmn.com or 412-288-4013

537047_70437721A Pittsburgh, Pennsylvania Judge has ruled at the trial court level that there is no private cause of action for the alleged failure of a major hospital network to secure and protect PII and PHI. Denying Class claims, Judge Wettick has ruled that because the legislature has not created such a right, that only the Pennsylvania Attorney General has the right to bring a claim in this circumstance. See the Legal Intelligencer article here: http://tinyurl.com/nphostc  We will get more details on this case and pass them along with our analysis.

Business Leaders Rank Cyber Risk #2 on List of Main Concerns

Posted By Henry M. Sneath, Chair of the Cybersecurity and Data Breach Prevention and Response Team at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C.  hsneath@psmn.com or 412-288-4013

Travelers Business Risk ImageTravelers Indemnity and Insurance released its annual Business Risk Index, which is a survey of the concerns of business leaders and decision makers. Not surprisingly, for 2015, Cyber Risk moved up to the number 2 concern on that list, right behind rising healthcare costs. In some industry sectors it is the number 1 concern. The Banking and Financial Services, Professional Services, and Technology sectors each ranked cyber risks as the main driver of sleepless nights.  The chart on page 3 of the survey is very instructional as to the different concerns between small, medium and large businesses. Small businesses have less concern about data breach than larger businesses, but perhaps small businesses are overlooking their vulnerability and attractiveness as targets. If they care less, they will likely protect less, and become easy targets for hackers. It should be a huge concern for all businesses in all industries as no one appears immune. If you data store or deal in Personal Identifiable Information (PII) or Personal Health Information (PHI) as part of your business, then you are a valuable target. If you have financial or credit information, or trade secrets to protect, then perhaps your competitors, foreign governments and political hackers want to look inside your data. Many insurers are now offering Cyber Risk Insurance to provide defense and indemnity against these risks. Every business should have a data breach prevention and response team of employees and outside consultants and lawyers to audit the company’s vulnerability and to set the plan for a response when a breach occurs.  See the complete Travelers Business Risk Index at: https://www.travelers.com/prepare-prevent/risk-index/business/index.aspx

Target Agrees to Settle Class Claims Over 2013 Data Breach for $10M

Posted By Henry M. Sneath, Chair of the Cybersecurity and Data Breach Prevention and Response Team at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C.  hsneath@psmn.com or 412-288-4013

Data Breach broken_security_lock photo Target Corp. agrees to settle the 2013 data breach class claims prior to argument on class certification. Lead plaintiff’s counsel admitted the uphill battle he faced to obtain class certification due primarily to the difficulty in these consumer data breach cases of proving commonality of claims. This settlement, which still needs court approval for its proposed $10M payout, will not settle claims by commercial entities, but only individual consumer claims. Here is a good article with more detail from the National Law Journal. We will continue to follow this settlement and the handling of the commercial claims as this blog increases our focus on Cybersecurity and Data Breach Prevention and Response issues.

See this link to the NLJ for more info:  http://tinyurl.com/kxwjrb9

 

 

Cybersecurity (CISA) Bill Moves out of Congressional Committee

j0402514Posted By Henry M. Sneath, Chair of the Cybersecurity and Data Breach Response team at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C.  hsneath@psmn.com or 412-288-4013

Privacy concerns continue to dog the CISA (formerly CISPA) bill, but it easily passed out of the  Senate Intelligence Committee yesterday.  Pundits claim that the bill pits “big government – NSA, Homeland Security et al allegedly aided by Big Tech Companies” against privacy advocates who want less regulation of data and the internet. I’m not sure if it lines up that neatly however. See this short article with a summary of the committee process from Wired.Com.

Here is an advocacy website piece which supports defeat of he bill.

We will continue to monitor the path of the bill to see if it makes it to the Senate Floor for a vote. For the complete text of the bill, view it at this link.

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Henry M. Sneath on Google+ or see his PSMN ® bio.

Ripple Effect from Alice and Mayo Cases Being Felt in Patent World

shutterstock_26396608By: Henry Sneath, Chair of the Intellectual Property practice at Picadio Sneath Miller & Norton, P.C. in Pittsburgh, Pa.  hsneath@psmn.com or 412-288-4013

Sharing a great post from Dennis Crouch and his tremendous blog: Patently-O

New Section 101 Decisions: Patents Invalid

The Supreme Court’s decisions from Alice and Mayo are beginning to really have their impact. A few examples:

  • Walker Digital v. Google (D. Del. September 2014) (data processing patent invalid under 101 as an abstract idea) (Judge Stark).
  • Genetic Tech v. LabCorp and 23AndMe (D. Del. September 2014) (method of predicting human performance based upon genetic testing invalid under 101 as a law of nature) (report and recommendation from Magistrate Judge to Judge Stark)
  • Ex parte Cote (P.T.A.B. August 2014) (computer method and hardware for ‘phase shifting’ design data invalid under 101)
  • Ex parte Jung (P.T.A.B. August 2014) (diagnostic method associated with epigenetic risk factors invalid under 101).” Patently-O.

To view the entire post – please visit Patently-O at this link: http://tinyurl.com/otj6v6n