Tagged: Federal Defend Trade Secrets Act

Another Motion to Dismiss Federal Defend Trade Secret Act Claim is Denied

Another Motion to Dismiss Federal Defend Trade Secret Act Claim is Denied

Following a national trend, another Defend Trade Secrets Act (DTSA) claim has survived a motion to dismiss filed in a California district court. The DTSA enables trade secret owners to pursue trade secret misappropriation claims in federal court if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce. In the recent Volans-i, Inc. v. SpektreWorks, Inc. case, the parties both developed and built long-range high-payload aircrafts known as drones. Pursuant to a consulting agreement, the defendant allegedly assisted Volans-i with design, engineering, testing and other work related to Volans-i’s C-10 and C-20 drones and had access to Volans-i’s trade secrets related to the same. The consulting agreement allegedly prohibited SpektreWorks from using Volans-i’s confidential information or its consultant work product other than to provide consulting services to Volans-i. Volans-i alleged that in violation of the DTSA and in breach of the parties’ agreement, the defendant sold a knockoff of its C-10 containing an avionics board which copied the design of Volans-i’s avionics board and utilized many identical components—thereby “copying plaintiff’s design and component choice[.]” 2019 U.S. Dist. LEXIS 90923, at *5. In its motion to dismiss, SpektreWorks argued...

Is Employer to Whom Trade Secrets are Allegedly Disclosed a Necessary Party in DTSA Claim Against Former Employee?

Is Employer to Whom Trade Secrets are Allegedly Disclosed a Necessary Party in DTSA Claim Against Former Employee?

Given increased employee mobility, claims under the Federal Defend Trade Secrets Act (DTSA) are on the rise. The DTSA provides a federal cause of action for misappropriation of a trade secret related to a product or service used in, or intended for use in, interstate or foreign commerce. See 18 U.S.C. § 1836(b). When considering a complaint against a former employee for violations under the DTSA, is the new employer to whom information is allegedly disclosed a necessary and indispensable party? A Massachusetts district court recently said no. In Phio Pharms. Corp. v. Khvorova, the plaintiff Phio Pharmaceuticals Corporation (PPC) sued the defendant—the company’s former Chief Scientific Officer—for misappropriation under the DTSA. PPC alleged that the defendant assigned to U Mass Medical School (defendant’s new employer and competitor of PPC) a patent application describing a class of molecules that PPC and the defendant allegedly investigated while the defendant was working for PPC. PPC sought the return of all trade secret information allegedly in the defendant’s possession and an injunction against further use or disclosure of its confidential information. The defendant moved to dismiss claiming that U Mass was an indispensable party under Federal Rule of Civil Procedure 19. The court...

Another District Court Addresses Viability of “Continuing Misappropriation” Under the Federal Defend Trade Secrets Act

Another District Court Addresses Viability of “Continuing Misappropriation” Under the Federal Defend Trade Secrets Act

The Federal Defend Trade Secrets Act (DTSA) provides a federal cause of action for misappropriation of a trade secret related to a product or service used in, or intended for use in, interstate or foreign commerce. See 18 U.S.C. § 1836(b). The DTSA applies to any trade secret misappropriation for which any act occurred “on or after the date of the enactment” of the DTSA. See P.L. 114-153 § 2(e). A Missouri district court recently held that the DTSA applies to trade secret misappropriation that continues after the DTSA enactment date (May 11, 2016)—even if the misappropriation began before the enactment date, see Roeslein & Assocs. v. Elgin, Civ. No. 17-1351(JMB), 2019 U.S. Dist. LEXIS 6981, at *36 (E.D. Mo. Jan. 15, 2019), adding to mounting precedent concluding the same. In Roeslein, developers of energy production facilities sued one individual (a former employee) and three corporate defendants for violation of the DTSA, among other claims. The corporate defendants moved to dismiss claims asserted against them under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that the plaintiffs’ DTSA claims were not cognizable because the plaintiffs failed to allege misappropriation on or after the DTSA’s enactment date. The court granted-in-part...