And Then There Was One…Massachusetts Adopts Uniform Trade Secrets Act

Almost every state in the nation has adopted some version of the Uniform Trade Secrets Act (UTSA). For many years, the two biggest holdouts had been Massachusetts and New York, which both stubbornly clung to a mélange of common law principles to protect trade secrets.

As of Friday, August 10, Massachusetts joined the UTSA club by adopting its own version of the UTSA. However, that adoption was part of a larger effort to regulate employment non-competes in Massachusetts. So in addition to providing new statutory protection for trade secrets that will be largely congruent with the law in other states (and under the federal Defend Trade Secrets Act), the bill signed by the governor also governs employment non-competition agreements. The new law requires that employers who want to have enforceable non-competition agreements with their employees (and some independent contractors) will have to provide what is known in Europe as “garden leave pay,” or some other “mutually-agreed upon consideration.” Under the “garden leave pay” concept, the employer needs to pay the employee compensation during the period of the non-compete, which minimum compensation the Massachusetts legislation defines as at least 50 percent of the employee’s highest annualized base salary earned during the two years before termination.

It will be interesting to watch how Massachusetts courts apply the UTSA in light of the centuries of trade secret common law that have developed in Massachusetts in the absence of a statute. And the question now becomes whether New York will continue to go its own way in the area of trade secrets law, or decide to join the club.

The State Can Plunder Your Copyright: Allen v. Cooper

In 1710, during the reign of Queen Anne, Great Britain’s Parliament enacted the statute that gave rise to copyright as we know it—the Statute of Anne—which was the first statute to declare that the subject matter of copyright would be regulated by the government and the courts, rather than agreements between private parties. Seven years later, the English pirate Blackbeard captured a French merchant vessel, renamed her the Queen Anne’s Revenge, and soon after ran her aground off the coast of North Carolina. As demonstrated by the recent Fourth Circuit decision in Allen v. Cooper, Blackbeard’s choice of the ship’s name proved prophetic. Continue Reading

California Enacts New Privacy Law: How Will It Impact You?

by Leila Javanshir, Miller Nash Graham & Dunn 2018 Summer Associate

On June 28, 2018, yet another new law hit the data privacy world that will impact the ways companies around the world will handle their data. The implementation of the California Consumer Privacy Act (CCPA) is a landmark moment for consumers and businesses alike.

What Does It Mean for Your Business?
This comprehensive privacy law, which will take effect on January 1, 2020, will cause a drastic shift in the way companies may collect and use personal information of California residents.

First, the new law grants California residents the right to know what information is being collected about them, why that information is being collected, and with whom that data is being shared. Further, it provides consumers the right to prohibit companies from selling or sharing their information as well as the right to tell companies to delete their information (subject to certain exceptions). Continue Reading

With Non-Compete Provisions, Let’s Remember the Requirement of a “Protectable Interest”

The strongest approach for an employer hiring someone supposedly bound by a non-competition provision may be to present an argument that the information in question is not information that qualifies as a “protectable interest” to begin with.

Proving that information is “protectable” can be difficult. Customer lists and price lists are especially tricky. If they are developed through substantial effort and kept in confidence, and the information is not otherwise readily obtainable, they typically qualify as protectable. But if the list contains information that is not much more than publicly available information (for example, picking up your phone, going online, finding a directory of persons in the industry), they typically don’t. Often, a would-be employer can develop prices by locating purchases by a public agency that state laws require to be disclosed. That same employer may also have other resources that identify customers, as discussed above. A savvy employer likely already uses these types of resources to gain an advantage in competing for customers even without the need to hire a new employee. Continue Reading

Supreme Court Extends Reach of Patentee to Recover Lost Foreign Profits

The Supreme Court on Friday held that WesternGeco, LLC (“WesternGeco”), owner of patents for a system used to survey the ocean floor, can recover profits from sales it lost outside the U.S. due to Ion Geophysical Corp.’s (“ION”) infringement of its patents. Under section §271(f) of the Patent Act, a company can be liable for patent infringement if it ships components of a patented invention overseas to be assembled there. A patent owner who proves infringement is entitled to recover damages under section §284. The question was whether these statutes allow the patent owner to recover for profits it lost from foreign sales that did not occur because of the infringing activity. The Supreme Court held that they do.

At trial, a jury found that ION was liable for infringement under §271(f) for selling a system that was built from components manufactured in the United States, shipped to companies abroad, and assembled there into a system indistinguishable from WesternGeco’s patented system. The jury awarded WesternGeco damages in royalties and lost profits. ION moved to set aside the verdict, arguing that WesternGeco could not recover damages for lost overseas sales because §271(f) does not apply extraterritorially. The District Court denied the motion, but the Federal Circuit reversed. After an earlier Supreme Court decision remanding the case in light of Halo Electronics, Inc. v. Pulse Electronics, Inc., the Federal Circuit reinstated the portion of its decision regarding §271(f)’s extraterritoriality, and denied the patent holder recovery of the profits it lost from overseas sales. Continue Reading