Qualcomm Obtains Trade Secrets Injunction Against Broadcom

This just out from Forbes.com - Qualcomm has reportedly obtained a court-ordered injunction against Broadcom regarding WCDMA technology Qualcomm allegedly patented. The patent battle is scheduled to go to trial in October of 2007. We anticipate that Broadcom may ask for reconsideration of the injunction and will keep an eye on this one for you.

Here's what Qualcomm says about the WCDMA technology: http://www.qualcomm.com/technology/wcdma.html.

Here's what Broadcom says about the WCDMA technology: http://www.broadcom.com/press/release.php?id=917157.

This is likely to become a battle royale. Stay tuned.

Are Investment Decisions Trade Secrets?

From TransWorldNews, and following up on our earlier posting here, a story concerning a conference call, available for $95, on the subject of whether hedge funds’ trading strategies are trade secrets, as Phillip Goldstein of Bulldog Investments claims.

The call, according to the release, touches on topics such as the question of whether the SEC 13-F filing requirements are unconstitutional; what makes for a trade secret; and what fair market value might be.

This issue again looks likes it's heading for the courts.

Gather Intelligence, But Play it Straight

From the Minneapolis Star-Tribune, and in the wake of the Hewlett-Packard scandal, a good article by two Faegre & Benson lawyers about conducting competitive intelligence the right way.

The key thought: don't lie and don't let your investigators lie.

So You Think They Got Your Secrets

From our partner in Tysons Corner, Virginia, Mike Holm, a great article on employees stealing trade secrets and the things in-house counsel should know in order to act fast.

This article is published in this week's Washington Legal Times and on-line at Law.Com.

Two Coke Trade Secrets Defendants Plead Guilty

CNNMoney.com is reporting that "two men pleaded guilty Monday to stealing trade secrets from soft drink giant Coca-Cola. The men, who were not employees of Coca-Cola, were indicted July 12 along with a former Coke employee on charges that they conspired to steal trade secrets from the soft-drink giant and sell them to rival Pepsi for $1.5 million. Ibrahim Dimson, 30, of New York, and Edmund Duhaney, 43, of the Atlanta suburb of Decatur, were also charged with unlawfully replicating and transmitting trade secrets and receiving and possessing trade secrets. Sentencing for the men was set for Jan. 29. Each could receive a maximum sentence of 10 years in prison and a fine of up to $250,000. Coke employee Joya Williams, 41, of Atlanta, has entered a not guilty plea to the grand jury's indictment. She remains free on a $25,000 bond awaiting trial set for Nov. 13."

We've been watching this case closely since the indictments came down on July 12th. Ms. Williams, the only one of the defendants who was an insider at Coca-Cola, certainly cannot be pleased with the news that her alleged co-conspirators have plead guilty. Although she is currently awaiting trial set for November 13th, one wonders whether these pleas will force her into a plea of her own.

We'll announce any further developments.

IBM's Motion to Dismiss Granted Against Butera & Andrews For Alleged Violations of Computer Fraud and Abuse Act

On a case we earlier reported here, the law firm Butera & Andrews sued International Business Machines Corp. for alleged violations of, among other things, the federal Computer Fraud and Abuse Act. Butera & Andrews' law firm computer system was allegedly targeted for a hacking effort by someone who utilized an IP address that, as a computer forensic and security review revealed, indicated the hacking effort came from an IBM facility in Research Triangle Park, North Carolina. Butera & Andrews had no information to suggest that IBM had authorized, directed or ratified such conduct, of course, and did not allege as much in their complaint filed in federal court in the District of Columbia.

IBM moved to dismiss the complaint for failure to state a claim on which relief can be granted. IBM argued that 18 U.S.C. sections 1030(a)(2) and 1030(a)(5) require intentional acts and that, therefore, Butera & Andrews' claims must fail because the face of the complaint did not allege any intentionality on IBM's part but merely implied that perhaps a rogue IBM employee was engaged in cyberspace criminal activity on his or her own. The federal court agreed with IBM and dismissed Butera & Andrews' entire complaint, holding that an intentional act must be alleged and respondeat superior liability is not enough to state a claim against IBM for violations of the Act.

The decision is currently cited as Butera & Andrews v. International Business Machines Corp., 2006 WL 2971107 (October 18, 2006 D.D.C.).

Have a good weekend.

Coke Trade Secrets Trial -- Likely Delay

From the AP via the Jacksonville Florida Times-Union, a story about one of the Coke trade secrets defendants, former Coke administrative assistant Joya Williams, seeking to delay the trial for several months. The court had earlier published a notice indicating that the trial would begin next month.

According to the story, Williams' attorney cited the complexity of the case, her client's emotional strain over the charge and upcoming surgery the defendant's father is expected to have as reasons why a delay should be granted.

The filing also said that the prosecutors did not oppose the continuance. In general, that means the case will be put off, probably until sometime next year.

EEOC Playing Loose with Trade Secrets

One consistent theme in the cases we follow is the bad things that happen when your trade secrets wind up in the hands of the government. Another chapter in those annals can be found in Judge Leon's recent decision, Venetian Casino Resort v. EEOC, 2006 WL 2806568 (D.D.C. Sep. 29, 2006).

The case arose out of a mass hiring to staff up a new Las Vegas casino in 1999. That process resulted in a number of discrimination claims which were investigated by the EEOC. The plaintiff casino was concerned that its confidential and trade secrets information -- presumably including its employment policies and practices, although we're never told -- could be released by the EEOC to charging parties and others without a Freedom of Information Act request.

Plaintiff contended that the EEOC's practice violated FOIA, the federal Trade Secrets Act (see here for discussion of another case under that fairly obscure act), as well as Title VII, an executive order and the copyright act.

The court made short shrift of all those claims. The court found that an earlier (1981) Supreme Court ruling upholding the EEOC policy to permit disclosure to parties or witnesses. Specifically, regarding the Trade Secrets Act, the court held that it had to be narrowly construed and, in any event, created no private right for the plaintiff.

As usual, if your trade secrets end up in the hands of the government, they likely won't be trade secrets for too long.

Not Much of A "Trade Secret" - Oops

Stellar-Mark is a company that sells coating materials for use in the fabrication and repair of parking decks. It apparently had a beef with a company called Advanced Polymer Technology Corp. - so it sued it and a couple of former associates. In federal court. Among the numerous claims it brought against the defendants was a trade secret misappropriation claim. The court, nonplussed by the litigation efforts and failed allegations of Stellar-Mark, noted that the "trade secret" was identified in discovery as being Stellar-Mark's system of labeling the use of its products and that Stellar-Mark's products come in two separate containers and the labeling advised the user that he/she must mix the contents of the Stellar-Mark product in container A with the contents of the Stellar-Mark product in container B. The court noted that this did not appear to be much of a secret at all - as it was actually specified for customers to use. That, and a lot of other factual inaccuracies and advocacy defects, ended up with the federal court issuing an order that Stellar-Mark and its attorneys needed to show cause why they shouldn't be sanctioned for violating Rule 11 of the Federal Rules of Civil Procedure. The case is cited as Stellar-Mark, Inc. v. Advanced Polymer Technology Corp., 2006 WL 2860924 (October 4, 2006 D. Minn.).

Coke Trade Secrets Case Set for Trial on Nov. 13

From MSNBC.com, a report that the trial of the three defendants accused of conspiring to steal Coke's trade secrets is set for November 13 in federal court in Atlanta (albeit with two other cases set before it).

The court's notice indicates that the trial is expected to last seven days.

According to the story (and recapping), Joya Williams, Ibrahim Dimson and Edmund Duhaney were indicted July 11 on a federal conspiracy charge that accuses them of stealing new product samples and confidential documents from Atlanta-based Coca-Cola and trying to sell them to Purchase, N.Y.-based Pepsi.

Womble Carlyle, the FBI and Cisco Systems Present: Company Secrets at Risk: Protecting Your Company's Trade Secrets and IP from Theft

Please join us for an insightful program that will include a federal law enforcement perspective on identifying threats to your company's vital information and a legal perspective on some best practices you can use to protect your company's trade secrets and intellectual property.

Presenters include:

Michael Greer, Special Agent, FBI
Tom McGrath, Special Agent, FBI
Press Millen, Member, Womble Carlyle
Todd Sullivan, Member, Womble Carlyle
Mike Hubbard, Of Counsel, Womble Carlyle

CLE credit applied for

When: October 26, 2006
Time: 1 p.m. - 4 p.m.
RSVP by Monday, October 23
Where: Cisco Systems in RTP
7025 Kit Creek Road
Research Triangle Park, NC 27709

Seating is limited.

For more information on this event, contact Robert DiDomenico at (919) 755-8182 or Sara Mogilski at (919) 755-8134 or via email at EventRSVP@wcsr.com.

Defunct Company Takes on Motorola in Florida Jury Trial

From the Miami Herald, an interesting story about a small and now defunct Florida technology company, SPS Technologies, which is taking on Motorola in a Florida state court jury trial beginning this week.

The plot is reasonably familiar: SPS and Motorola talked about a joint venture. Motorola even paid $5 million and got a look at SPS's technology to develop a tracking product to locate vehicles, before deciding to walk away. SPS went broke, but later sued Motorola contending that Motorola used its technology in several products.

Notably, SPS has hired Florida attorney Willie Gary, a noted giant killer. The Herald quotes Gary: "They partnered with our guys, they got them to let their guard down and led them to give up trade secrets."

Gary's firm is taking the case seriously. According to the report, he has brought about 20 attorneys, paralegals, consultants and technology staff to the Riverside Hotel in Fort Lauderdale for the duration of the trial, expected to last six to eight weeks.

We'll keep you posted.

Hewlett-Packard -- The Big Shoe Drops

Can concerns about corporate security go too far, even become obsessive in ways that ultimately prove detrimental for the company and, especially, those who are obsessed?

In case there was any question in your mind, the answer is "yes."

California's Attorney General announced felony indictments yesterday of HP's former chairman, a former company lawyer (who also, ironically, served as "Chief Ethics Officer"), and three investigators in the scandal arising out of the leak investigation in which the private investigators used "pretexting," aka lying, to obtain phone records of HP directors and others. (The link above to the New York Times has the whole story.)

According to the Times, there are four charges: using of false or fraudulent pretenses to obtain confidential information from a public utility, unauthorized access to computer data, identity theft, and conspiracy to commit each of those crimes.

Patricia Dunn, the former chairman, apparently hired the first investigator in 2005 and "received frequent reports" on the progress of the investigation. (Those frequent reports must have either directly or indirectly indicated to her the nature of the unsavory tactics being utilized. The Chief Ethics Officer took over the investigation in 2006.

The Times reports that the case is made more difficult by the fact that California did not specifically outlaw pretexting at the time of the investigation. Thus, the somewhat obscure nature of the charges. Is a cell phone company a "public utility"? Were identities really stolen?

These are going to be difficult legal questions as the case moves forward.

Spying in the Valley -- Updates on Alleged Chinese Economic Espionage

From The Argus in Fremont, California, more on a trial upcoming next year concerning alleged Chinese government economic espionage. The case involves stolen blueprints from Sun Microsystems, Transmeta, NEC and Trident. According to the article, investigators say the two defendants "planned to start a joint venture with the Chinese city of Hangzhou, and were to receive funding from Hangzhou and a central government program." The FBI nabbed the two with a suitcase full of trade secrets.

The Contra Costa Times, also from California, reports on another spate of Chinese economic espionage matters. The article says "the culprits may be government-backed research institutions, state-owned enterprises or individual provincial governments" and "China's central government runs a program linked to its military, dubbed 863, that invests in companies with innovative technologies and that the FBI suspects is involved in many economic espionage cases."