Posted onMay 25, 2016byHenry Sneath|Comments Off on DTSA Cases Being Filed: Defend Trade Secrets Act 2016
Posted by: DTSALAW.Com and DefendTradeSecretsAct.LawyerHenry 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 atsneathhm@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.
Posted onMay 11, 2016byHenry Sneath|Comments Off on 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 athsneath@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 Acthttps://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.”
Posted onMay 1, 2016byHenry Sneath|Comments Off on Big IP NEWS: Defend Trade Secrets Act 2016 (DTSA) Passes Congress – President to sign
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 athsneath@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 damagescaused 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 maliciouslymisappropriated, 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.
Posted onJune 3, 2015byHenry Sneath|Comments Off on 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
A 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.
Posted onMay 21, 2015byHenry Sneath|Comments Off on 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 Teamat Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. hsneath@psmn.com or 412-288-4013
Travelers 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
Posted onMarch 20, 2015byHenry Sneath|Comments Off on 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
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.
Posted onMarch 13, 2015byHenry Sneath|Comments Off on Cybersecurity (CISA) Bill Moves out of Congressional Committee
Posted 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.
On March 3, 2015, the Third Circuit heard oral argument in FTC v. Wyndham Worldwide Corp. (No. 14-3514) on the novel issue of whether or not the Federal Trade Commission can sue a company for failing to properly secure consumer data. The case arose when the FTC sued Wyndham Worldwide Corporation, after Russian hackers broke into the Wyndham’s computer network and stole the credit card information for thousands of customers. The FTC filed the suit based on its authority under federal law to patrol unfair business practices. The Wyndham Hotel contends that its cybersecurity system is outside the realm of the FTC’s authority and that the FTC had not given notice about what the law would require with regard to corporate data security practices. The case reached the Third Circuit after the District for New Jersey denied the Wyndham’s motion to dismiss, and the Wyndham filed an interlocutory appeal. The panel’s, consisting of Judge Thomas Ambro and Senior Judges Anthony Scirica and Jane Roth, interest in the novel issue was apparent from the fact that oral argument lasted twice as long as the allotted time and the Court requested supplemental briefing.
See this article for additional information (subscription required). A recording of the oral argument can be found here at the 3rd Circuit’s website.
Contact our Pittsburgh Intellectual Property, Cyber and Data Security, Trade Secret, DTSA and Technology Attorneys at Houston Harbaugh, P.C. through IP and Litigation Sections Chair Henry M. Sneath at 412-288-4013 or sneathhm@hh-law.com. While focusing first on health care and prevention issues for family, friends and employees, we are also beginning to examine the overall Covid Law related issues in business litigation, contract force majeure, trusts and estates litigation and insurance coverage issues that will naturally follow the economic disruption of the Covid-19 pandemic.
Some posts herein are from the HH-Law resources of PSMN® and PSMNLaw®. Business Litigation. Pittsburgh Strong® and DTSALaw®, PSMN® and PSMNLaw® are federally registered trademarks of HH-Law. See Firm Website at: https://www.hh-law.com/Professionals/Henry-Sneath.shtml
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. 
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