BLOGS: Trade Secrets Blog

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Friday, March 30, 2012, 3/30/2012 04:16:00 PM

Vacating of Big Trade Secrets Award Against PepsiCo Affirmed

Causes of action generally have statutes of limitations establishing the time periods in which they must be brought.

Wait too long and your claim will be tossed out of court on limitations grounds as stale.

The Wisconsin Rapids Tribune provides a fine example of a stale claim in the trade secrets context.

According to plaintiffs' allegations, they met with representatives of PepsiCo’s Wisconsin distributors in 1981 to discuss a bottled water concept. The parties allegedly signed a confidentiality agreement.

Flash forward 25 or so years when one of the plaintiffs got thirsty and purchased a bottle of Pepsi’s Aquafina bottled water. He decided Pepsi had ripped them off and sued in Wisconsin state court for breach of the agreement and misappropriation of trade secrets. Pepsi got into the bottled water business in 1994.

Plaintiffs filed suit in 2009 and somehow they got a default judgment for $1.26 billion which Pepsi got vacated and ultimately dismissed on the grounds that the six-year (for contracts) and three-year (for trade secrets) statutes of limitations.

Plaintiffs tried to file a new suit which dismissed on the same grounds.

Those rulings were affirmed by a Wisconsin appeals court which ruled that the plaintiffs were not reasonably diligent and should have known of the existence of Aquafina well before 2007.

Yet another example of how you cannot slumber on your rights.

Friday, March 23, 2012, 3/23/2012 03:33:00 PM

Yet Another Case of Chinese Economic Espionage?

From Tire Review (a publication that I didn’t know existed, but I’m glad it does), the story of Xiaorgon Wang, a 50-year-old man from Hudson, Ohio, indicted in federal court in Ohio on charges that he stole trade secrets from his former employer, tiremaker Bridgestone Americas.

Tire Review says Wang, who worked at Bridgestone as a researcher, downloaded proprietary information after he was fired, including research on polymer formulas and unpatented data (i.e. trade secrets). It also reports that the FBI says Wang lied about his relationship with the Shanghai Frontier Elastomer Co.

Sounds like another case of a Chinese state enterprise trying to grab American know-how.

We'll keep you in the loop.

Monday, March 12, 2012, 3/12/2012 10:04:00 AM

More Details in DuPont Trade Secrets Case

An excellent follow-up from the San Jose Mercury News on the Chinese economic espionage case breaking open in the Northern District of California.

The case concerns DuPont’s secret process for manufacturing titanium dioxide, a compound that makes products white (think paper, toothpaste, and even the inside of Oreo cookies, according to the Mercury News).

According to prosecutors, China was desperate to get hold of the process and, starting in the 1990’s, created a company to steal it. Walter and Christina Liew, a Northern California couple, set out to get the goods. According to the indictment, they approached a former DuPont employee who claims that they “overtly appealed to my Chinese ethnicity and asked me to work for the good of the PRC.”

The plot unraveled with an anonymous letter to DuPont. It filed suit and contacted the FBI. The FBI raised the Liews’ home and found a “trove” of incriminating documents in a safe deposit box. Walter Liew is now being held without bail as a flight risk.

The Chinese company defendant, Pangang Group Co., has a fully operational facility in China manufacturing titanium dioxide the DuPont way. (The picture above is from the China Times which identifies it as the site.)

The criminal case is obviously in its early stages, but this one has the hallmarks of a potential international incident.

Friday, March 09, 2012, 3/09/2012 08:53:00 AM

DuPont Trade Secrets Case

An interesting article, behind the Wall Street Journal’s paywall at this time, concerning the big case in which DuPont’s trade secrets were allegedly stolen by Walter and Christina Liew, both indicted last month.

The San Jose Mercury News has a free, but less detailed account, here.

Sunday, March 04, 2012, 3/04/2012 11:30:00 AM

Mattel v. MGA – Nice Bratz Summary

If we wanted to, this blog could be all Bratz, all the time. We’ve covered it a lot (see here, here, and here).

But we don’t want to do all Bratz, so it’s good to have a nice summary from USA Today, a paper not known for its trade secrets coverage.

The occasion is the filing of Mattel’s brief in the Ninth Circuit Court of Appeals. Mattel is appealing the $310 million judgment against it resulting from MGA’s counterclaim.

For those for whom this is new: Mattel is a toy maker, mostly known for Barbie, the best-selling doll of all time. MGA, a competitor, put out a new line of dolls – Bratz – starting in 2001. By 2006, Bratz were selling to the tune of nearly $1 billion annually and giving Barbie a run for her money.

Mattel sued first, in 2004, claiming that the Bratz designer first came up with the idea while working for Mattel and that MGA, therefore, infringed on Bratz’s copyright. A federal jury found to that effect in 2008, awarding Mattel $100 million, later overturned on appeal.

Back in the trial court for a second go-round, MGA filed counterclaims asserting that Mattel stole its trade secrets when it sent spies to toy fairs and trade shows.

In the second trial, the jury found no copyright violation, but awarded MGA $85 million in damages on its trade secrets claim. The trial judge added $85 million in punitive damages and tacked on $137 million in legal fees.

That’s what’s now on appeal.

In the appeal, Mattel is now abandoning its copyright claim and claiming that MGA’s trade secrets case was filed too late. Mattel is also challenging the attorneys’ fees award (and if you think about it, how can a case cost $137 million?).

We’ll keep you apprised without letting this one case take over our whole blog.
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