California Employment Law Update

Category Archives: Trade Secrets

Subscribe to Trade Secrets RSS Feed

Terminated Employee Could Proceed With Tortious Interference Claims Against Apple

Popescu v. Apple Inc., 2016 WL 3578970 (Cal. Ct. App. 2016) Dan Popescu sued Apple Inc. for damages after he was fired by his employer, Constellium Rolled Products Ravenswood, LLC. Popescu alleged that Apple took affirmative steps to convince Constellium to fire him in retaliation for his resistance to Apple’s alleged anticompetitive conduct. The trial … Continue Reading

Former Employee Who Accessed Employer’s Computers Was Properly Imprisoned

United States v. Nosal, 2016 WL 3608752 (9th Cir. 2016) In this criminal proceeding brought under the Computer Fraud and Abuse Act (“CFAA”), the United States government filed a criminal indictment against David Nosal (a former employee of Korn/Ferry International) as a result of his obtaining information from Korn/Ferry’s computer system for the purpose of … Continue Reading

Trade Secret Misappropriation Claims Should Not Have Been Dismissed

Richtek USA, Inc. v. uPI Semiconductor Corp., 242 Cal. App. 4th 651 (2015) Richtek sued three of its former employees (all residents of Taiwan) and the company they formed (uPI Semiconductor) for misappropriation of Richtek’s trade secrets. The trial court sustained the former employees’ demurrer to the complaint on the ground that the lawsuit was … Continue Reading

Federal Court Dismisses Computer Fraud and Abuse Act Claim That Was Filed Against Our Clients

Here’s a recent victory we obtained on behalf of our clients SunEdison, Inc., et al. The individual defendants (then-current employees of SunPower, Inc.) were alleged to have violated the federal Computer Fraud and Abuse Act (CFAA) by connecting USB devices to SunPower’s computer system and allegedly copying data. U.S. District Court Judge William H. Orrick granted … Continue Reading

Employees Could Proceed with Malicious Prosecution Action Against Former Employer’s Counsel

Parrish v. Latham & Watkins LLP, 2014 WL 4220542 (Cal. Ct. App. 2014) In a prior litigation, FLIR Systems, Inc., and Indigo Systems Corp. (collectively, “FLIR”) brought suit against their former employees, William Parrish and E. Timothy Fitzgibbons (the “Former Employees”), for, among other things, misappropriation of trade secrets.  The Former Employees defeated the claims … Continue Reading

Employee Was Bound By Stipulated Injunction That Prohibited His Solicitation Of Customers

Wanke, Indus., Commercial, Residential, Inc. v. Superior Court, 209 Cal. App. 4th 1151 (2012) In an underlying lawsuit, Wanke sued its former employees Scott Keck and Jacob Bozarth for misappropriation of trade secrets, among other things. That lawsuit was settled, and the parties agreed to a stipulated injunction pursuant to which Keck, Bozarth and their … Continue Reading

Trade Secret Action Was Prosecuted In Bad Faith, $1.6 Million In Sanctions Upheld

FLIR Sys., Inc. v. Parrish, 174 Cal. App. 4th 1270 (2009) FLIR Systems purchased Indigo Systems, which manufactures and sells microbolometers (a device used in connection with infrared cameras, night vision and thermal imaging), for $185 million in 2004. William Parrish and Timothy Fitzgibbons were shareholders and officers of Indigo before the company was sold … Continue Reading

Attorney And Her Clients Were Properly Sanctioned For Conduct Relating To Disclosure Of Trade Secrets

Wallis v. PHL Associates, Inc., 168 Cal. App. 4th 882 (2008) The trial court imposed approximately $43,000 in sanctions against Hygieia Biological Laboratories, its principals and their attorney in this case involving alleged misappropriation of trade secrets. During the course of the litigation, the parties agreed to a protective order, which the trial court issued, … Continue Reading

Non-Compete Agreements Were Unenforceable

Asset Marketing Systems, Inc. v. Gagnon, 542 F.3d 748 (9th Cir. 2008) Kevin Gagnon, doing business as “Mister Computer,” alleged that his former customer, Asset Marketing Systems (“AMS”), infringed his copyright in six computer programs that he wrote for AMS by continuing to use and modify them without his consent and that AMS misappropriated trade … Continue Reading

Statute Of Limitations For Trade Secrets Claim Dates From Time Of Owner’s Knowledge

Cypress Semiconductor Corp. v. Superior Court, 163 Cal. App. 4th 575 (2008) The trade secret owner in this case, Silvaco Data Systems, develops and licenses electronic design automation software. In late 1998, a former Silvaco employee, working for Circuit Systems, Inc. (“CSI”), incorporated Silvaco’s “SmartSpice” trade secrets into CSI’s product, “DynaSpice.” Silvaco sued the employee … Continue Reading

Employee Is Entitled To Recover Attorney’s Fees In Breach Of Contract Action Filed By His Former Employer

Profit Concepts Mgmt., Inc. v. Griffith, 162 Cal. App. 4th 950 (2008) Profit Concepts sued Greg Griffith, a former employee, for breach of contract and misappropriation of trade secrets in Orange County Superior Court. Griffith, who was an Oklahoma resident at the time, moved to quash service for lack of personal jurisdiction. (The contract contained … Continue Reading

Non-Compete Covenant Was Not Too Broad To Be Enforced

Alliant Ins. Services, Inc. v. Gaddy, 159 Cal. App. 4th 1292 (2008) Alliant Insurance Services purchased a competing insurance brokerage company from G. Scott Gaddy for $4.1 million and then employed him under a senior management agreement. Both the purchase and employment agreements contained covenants whereby Gaddy agreed not to compete with Alliant or to … Continue Reading

New Employer May Have Misappropriated Trade Secrets And Interfered With Prior Employer’s Business

San Jose Constr., Inc. v. S.B.C.C., Inc., 155 Cal. App. 4th 1528 (2007) Richard Foust was a project manager for San Jose Construction (“SJC”) for 4½ years before he became dissatisfied with his job and accepted a position at a higher salary with South Bay Construction (“South Bay”), one of SJC’s competitors. Foust believed that … Continue Reading

Company Failed To Prove Trade Secret Misappropriation By Former Employee

Yield Dynamics, Inc. v. TEA Systems Corp., 154 Cal. App. 4th 547 (2007) Yield Dynamics, which develops and markets software products designed to facilitate the fabrication of microchips, sued its former employee, Terrence Zavecz, and two business entities of which he is a principal for breach of contract, violation of the Uniform Trade Secrets Act and related claims. … Continue Reading

Staffing Company Was Entitled To Injunction Against Former Employee Who Took Trade Secrets

ReadyLink Healthcare v. Cotton, 126 Cal. App. 4th 1006 (2005) ReadyLink obtained an injunction against Jerome Cotton, a former employee, prohibiting Cotton from soliciting ReadyLink employees and customers and from using or disclosing ReadyLink’s trade secrets and confidential information. ReadyLink fired Cotton for stealing ReadyLink records containing proprietary and confidential information. During a search of … Continue Reading

Audio Recording Of Plan To Steal Competitor’s Employees And Trade Secrets Was Admissible

Jasmine Networks, Inc. v. Marvell Semiconductor, Inc., 117 Cal. App. 4th 794 (2004) Marvell Semiconductor, Inc. and Jasmine Networks, Inc. are competitors in the business of designing and manufacturing telecommunications chips. Marvell offered to buy some of Jasmine’s technology, along with some of its engineers, and Jasmine accepted after negotiating a nondisclosure agreement preventing Marvell … Continue Reading

Employer Was Entitled To Terminating Sanctions Against Former Employee

Computer Task Group, Inc. v. Brotby, 364 F.3d 1112 (9th Cir. 2004) Computer Task Group (CTG) sued William Brotby for breach of a non-solicitation/non-disclosure agreement that he signed while he was working as an information technologies consultant. CTG succeeded in obtaining an injunction prohibiting Brotby from working for Alyeska Pipeline Service Company, one of CTG’s … Continue Reading

Employee’s Conviction For Grand Theft Of A Trade Secret Is Reversed

People v. Laiwala, 115 Cal. App. 4th 850, 9 Cal. Rptr. 3d 466 (2004) Sadrudin Laiwala, a former engineer of Odeum Microsystems, a division of Hyundai Electronics America, allegedly copied and took with him a “DVD copy protection system” immediately prior to his departure from the company. Laiwala was criminally prosecuted for violation of California … Continue Reading

Attorney Did Not Act Unethically By Contacting Other Employees Of Company

Snider v. Superior Court, 113 Cal. App. 4th 1187 (2003) Quantum Productions, Inc. sued its former sales manager, David Snider, for misappropriation of trade secrets, breach of contract, interference with contractual relations and unfair competition after Snider resigned his employment with Quantum and formed a competing company. Quantum filed a motion to disqualify Snider’s attorney, … Continue Reading

Website Operator Was Properly Enjoined From Disclosing Trade Secrets

DVD Copy Control Ass’n, Inc. v. Bunner, 31 Cal. 4th 864, 75 P.3d 1 (Cal. 2003) Jon Johansen, a Norwegian resident, reverse engineered the Content Scrambling System (CSS), computer software used to encrypt the contents of Digital Versatile Discs (DVDs), and wrote a program called DeCSS that decrypts motion pictures stored on DVDs, thus enabling users … Continue Reading

Former Employees Were Properly Enjoined From Destroying Misappropriated Computer Files

Dodge, Warren & Peters Ins. Serv., Inc. v. Riley, 105 Cal. App. 4th 1414 (2003) James W. Riley and several of his co-workers were terminated from Dodge, an insurance brokerage firm, after Dodge learned of their intention to obtain copies of documents maintained in Dodge’s files and computer storage media before opening their own competing … Continue Reading

Attorneys Who Left Law Firm And Solicited Its Employees Were Liable For Tortious Interference

Reeves v. Hanlon, 106 Cal. App. 4th 433 (2003) Attorney Robert L. Reeves filed a lawsuit against attorneys Daniel P. Hanlon and Colin T. Greene and their law firm, Hanlon & Greene (H&G), after Hanlon and Greene abruptly resigned from their positions with Reeves & Hanlon (R&H) and allegedly persuaded certain R&H employees to join … Continue Reading

The Continued Use Or Disclosure Of A Trade Secret May Be Part Of A “Continuing Misappropriation”

Cadence Design Sys. v. Avant! Corp., 29 Cal. 4th 215 (2002) In this case, the California Supreme Court answered the following question of law certified to it from the United States Court of Appeals for the Ninth Circuit: Under the California Uniform Trade Secrets Act (UTSA), when does a claim for trade secret infringement arise: … Continue Reading

Court Rejects The “Inevitable Disclosure” Of Trade Secrets Doctrine

Schlage Lock Co. v. Whyte, 101 Cal. App. 4th 1443 (2002) J. Douglas Whyte was employed as a vice-president of Schlage where he was responsible for sales to The Home Depot (which alone accounts for 38 percent of Schlage’s sales) and other “big box” retailers such as HomeBase and Lowe’s. Whyte signed a confidentiality agreement … Continue Reading
LexBlog