February 10, 2021

Key Trade Secret Developments of 2020: Part 2

Faegre Drinker litigation partners Randy Kahnke, Kerry Bundy and Mike Sawers and associates Stacie Linguist and Anna Sallstrom concluded their two-part article for Law360 with “Key Trade Secret Developments of 2020: Part 2,” featuring five additional cases and decisions, related issues and takeaways on each topic.

Similar to part one, the authors discuss significant developments in trade secret law, including:

  1. The U.S. Court of Appeals for the Federal Circuit’s affirmance of a lower court’s denial of sealing requests where the motion was overbroad and unsupported, although subsequently narrowed
  2. The importance of satisfying the legal definition of a trade secret
  3. The use of prior bad act evidence
  4. The U.S. Court of Appeals for the Seventh Circuit’s reduction of a $700 million punitive damages award to $140 million to comport with due process
  5. The U.S. Court of Appeals for the Ninth Circuit’s ruling that refining trade secret identification after discovery is permissible

First, the authors describe how, according to the Uniloc 2017 LLC v. Apple Inc. decision, litigants should submit sealing requests in the first instance and should consider whether these requests comply with applicable requirements. Failure to do so may result in the outright denial of a sealing request.

Second, based on the U.S. Court of Appeals for the First Circuit decision in TLS Management and Marketing Services LLC v. Rodriguez-Toledo, the authors highlight the importance of clearly identifying and defining trade secrets and discerning them from public information.

Third, the authors detail how a Texas federal court considered Rule 404(b) prior bad act evidence in ResMan LLC v. Karya Property Management LLC. Thus, if the evidence paints a picture of bad conduct culminating in trade secret misappropriation, Rule 404(b) may be a tool at a plaintiffs’ disposal for providing a jury with evidence related to holding wrongdoers responsible for their theft.

Fourth, in the Epic Systems Corp. v. Tata Consultancy Services Ltd. decision, the authors examine how the Seventh Circuit’s imposition of a 1:1 ratio on compensatory to punitive damages may help future defendants in cases where compensatory damages are substantial argue for a similar limit. This case is also a useful example of how plaintiffs might show damages using the benefit to the defendant.

Finally, considering the InteliClear LLC v. ETC Global Holdings Inc., the authors note that defendants should evaluate whether to wait until the plaintiff engages in discovery before filing such a motion for summary judgment. Plaintiffs are also reminded to identify trade secrets with reasonable particularity to avoid a motion for summary judgment.

The full article is available for Law360 subscribers.

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