Subscribe to the IP Headline RSS feed | Subscribe to the IP Headline feed via EmailBNA INSIGHTS: 2011 Trade Secrets Litigation Round-Up
January 26, 2012 in Patent Trademark & Copyright Journal · Leave a Comment
By Jason C. Schwartz, Alexander H. Southwell, and Molly T. Senger
Gibson, Dunn & Crutcher, Washington, D.C. and New York
INTRODUCTION
Information security has become one of the top priorities for corporate executives and board members in 2012, according to a November 2011 survey from the Corporate Executive Board Co. See Emily Chasen, Information Security Jumps to Top Priority for Audit Committees (Nov. 28, 2011), available at blogs.wsj.com.
And with good reason.
A recent report by the U.S. Office of the National Counterintelligence Executive found that “FIS [Foreign Intelligence Services], corporations, and private individuals increased their efforts in 2009-2011 to steal proprietary technologies, which cost millions of dollars to develop and represented tens or hundreds of millions in potential profits.” See U.S. Office of the National Counterintelligence Executive, Foreign Spies Stealing U.S. Economic Secrets in Cyberspace: Report to Congress on Foreign Economic Collection and Industrial Espionage, 2009–2011 (Oct. 2011), available at dni.gov.
Indeed, a survey published in USA Today in November found that as many as 17 percent of persons polled admitted that they would disclose their company’s secrets for money, while another 8 percent confessed that they had already done so. See USA TODAY Snapshots® (Nov. 20, 2011) (citing Monster.com survey), available at scoop.it.
The growing need for U.S. companies to protect their trade secrets and other confidential, proprietary information is illustrated by the increasing number and significance of trade secret and related litigation over the past year. 2011 saw several high-stakes jury trials resulting in substantial damages awards to victims of trade secret misappropriation, such as the $920 million award to DuPont in its suit against Kolon Industries over Kevlar-related technologies, and the $310 million award to MGA Entertainment in its long-standing dispute with Mattel over the successful line of Bratz dolls.
The Department of Justice also brought a number of significant criminal prosecutions for trade secret theft and economic espionage in 2011, many involving defendants allegedly acting on behalf of foreign state-owned entities. In addition, 2011 bore witness to several significant judicial decisions impacting trade secret law, including a noteworthy ruling from the U.S. Court of Appeals for the Ninth Circuit regarding the scope of the Computer Fraud and Abuse Act— which is currently being reconsidered by the Ninth Circuit en banc—and a December 2011 decision from the Eighth Circuit, which may serve to expand what constitutes a protectable trade secret under the Uniform Trade Secrets Act.
We highlight these and other significant 2011 developments below, first addressing civil developments and then criminal developments…
