Trade secret cases
Supreme Court decided Alice Corp. CLS Bank International , which drastically curtailed patent protection for software and business methods. As a result, many companies have lost confidence in the ability to protect their technology with patents and are instead turning to trade secrets. The comparative lack of acquisition costs for trade secrets as opposed to patents only enhances their appeal. Likewise, patent litigation has become procedurally less attractive for some plaintiffs.
Whereas before, patent litigants could file a patent lawsuit anywhere infringement had occurred, now defendants may only be sued where they are incorporated or have a physical place of business. Together, the reduced ability to protect technology with patents and the increased cost and unpredictability of patent litigation have made the trade secret alternative more appealing. While only available when there has been an affirmative act of misappropriation — as opposed to the strict liability nature of patent infringement — compelling arguments to opt for trade secret enforcement over patent enforcement can be made when the option exists.
According to federal judicial caseload statistics, the rates for both federal and state trade secret litigation have skyrocketed. In fact, the number of federal trade secret cases increased by 14 percent for each year from to , according to a spring analysis by Willamette Management Associates.
Moreover, trade secret litigation tends to concern precisely the type of newly available and easily transportable technology discussed above.
Some studies indicate that from to , as much as 50 percent or more of federal and state trade secret litigation concerned technical know-how and software. As much as 50 percent or more of federal and state trade secret litigation concerned technical know-how and software. Additionally, trade secret plaintiffs have been highly successful. Only 61 out of the cases identified in the study — about 22 percent — were dismissed. This is lower than the historical average dismissal rate for complex civil litigation in federal courts 27 percent, according to litigation research company Lex Machina ; however, given the early stage of most of these cases, it is too soon to tell whether DTSA case dismissal rates will vary from historical ones.
Data on preliminary injunctions is ripe, however, and rather surprising. Upon enactment of the DTSA, it was generally expected that courts would be more inclined to grant preliminary relief, at least in part because the urgency of action in these cases was underscored by the availability of ex parte injunctions — whereby U.
Yet only five preliminary injunctions — about 2 percent — were granted in the cases, according to the Cybersecurity Lawyer study. A larger sample size of cases will reveal more reliable statistics, but it is noteworthy that the general expectation of an increase in preliminary injunctive relief under the DTSA is not reflected in the data to date. For better protection, two separate companies blend a portion of the herb and spice mixture. Then it is automatically processed to standardize the blending before it is sent to the restaurants.
There are rumors of other requirements about the secret recipe. One says when KFC updates its security systems, the recipe is temporarily moved to secure location in an armored car escorted by a high-security motorcade. Does your business have trade secrets that you want to protect? Not sure what to consider a trade secret?
Contact an experienced intellectual property attorney today. Coca-Cola made a choice to brand the recipe a trade secret instead of patenting it, which would have lead to the disclosure of the ingredients.
Since one of those ingredients may have been cocaine, Coca-Cola decided to keep the recipe as confidential information. This trade secret has spawned rumors of its own. One is that the recipe contains bugs or insects.
Another is that two employees each know only half the recipe or that only two people know the combination to the safe where it is stored. In case you doubt it, corporate espionage is real. In , and employee and two accomplices stole the formula and tried to sell it to Pepsi. Pepsi blew the whistle and let Coke officials know what was happening.
The employee and friends were arrested. The rubbing mud was developed to dull the surface of new baseballs, making them easier to grip. All the mud comes from the same place, but the business assures everyone it is on public land.
It is a trade secret passed on to new generations to prevent people from walking on the source. The New York Times has the most influential book list in the country, and it will not divulge its definition of a best seller. It apparently is not merely the number of books sold since a book that has sold fewer copies than another can make the list while the better selling book does not.
It is known that the Times gets information from chain stores, independent book bookstores, and wholesalers about sales figures, but that is the extent of the knowledge. The Times refuses to release its system because it fears publishers would then use the information to manipulate sales data to their advantage.
The inventor licensed the secret formula to Lambert Pharmaceuticals. It sued, saying it was no longer responsible for licensing fees. The court ruled that the contract did not stipulate that payments could be stopped if the trade secret was legitimately discovered by others, especially since Pfizer had acquired the formula when it was still secret and derived competitive advantage from it.
Originally WD was developed to prevent corrosion. The chemist kept the formula secret and sold it a few years later. Like Coca-Cola, the secret formula has never been patented, so competitors could not discover what is in it. The company does reveal what is NOT in the formula, including a statement that there are no known cancer-causing agents. The CEO wore armor and rode on horseback.