Reminder from SDNY - Trade Secrets Need To Be Kept Secret

A recent opinion from an SDNY federal district court reminded me of a client I represented many years ago. The company insisted that the core functionalities and user interface of its software program were trade secrets. A competitor had copied these, and the client asked my firm to commence a lawsuit for misappropriation of trade secrets.

An investigation showed that the client’s software was disclosed to prospective clients in one-on-one meetings and at trade shows without any requirement that a confidentiality or nondisclosure agreement be signed. Once a customer licensed the software an NDA was part of the sale, but before then it was not.

A secondary concern was that the software was used by hundreds of employees corporate licensees (via a site license), but these employees were not told that the software contained trade secrets – only the manager that signed the license agreement agreed to this. Was this sufficient to protect the trade secrets in the software?… Read the full article

When the Judge Distrusts Your Lawyers: Waymo v. Uber

Uber is in trouble.

The trial between Alphabet’s Waymo and Uber over Waymo’s self-driving car trade secrets was scheduled to begin on December 4th before Judge William Alsup, of  Oracle v. Google fame. (Readers familiar with coverage of that case know how smart and tough he is).

According to published reports, at the last minute evidence (a letter) was discovered suggesting that Uber has a team dedicated to collecting trade secrets from competing companies. Allegedly, the people involved use disappearing-message apps, anonymous servers, and secret computers and phones to communicate without leaving a trail. The purpose was to ensure there was no paper trail that would come back to haunt the company in any criminal or civil litigation.

However, now that this has been disclosed, that strategy has backfired.

Whether this Uber team targeted Waymo is not entirely clear, but there is enough suspicion that it did for Judge Alsup to have postponed the trial so Waymo can conduct additional discovery – discovery that would have already have taken place had Uber disclosed this earlier.… Read the full article

Fagin, Becker and the Steely Dan Buy/Sell Agreement

by Lee Gesmer on November 24, 2017

Fagin, Becker and the Steely Dan Buy/Sell Agreement

The first time I heard of a “buy/sell agreement” was around 1970 when I was 19  – just a few years before I fell in love with Steely Dan’s music.

Back then my father owned a textile business in Haverhill, Massachusetts with a 50-50 “partner,” and he explained that the business had insurance policies on both of their lives. If either partner died, the insurance would fund the purchase of the deceased partner’s shares, and the surviving partner would end up owning 100% of the company.

This, he explained was a “buy/sell agreement” – the deceased partner’s estate was bound to sell, and the surviving partner’s estate was bound to buy.

Fortunately, neither my father or or his partner ever had to exercise rights under this agreement – my father retired in 1981, and sold his half of the business to his partner.

It turns out that at around the same time that I first heard of a buy/sell agreement Donald Fagan and Walter Becker, the creative geniuses behind Steely Dan, were doing something similar.… Read the full article

Google and the Global Takedown

by Lee Gesmer on July 21, 2017

Google and the Global Takedown

“One country shouldn’t be able to decide what information people in other countries can access online”    

 David Price, senior product counsel at Google

A risk long anticipated by Internet law observers is that the courts might become more aggressive in regulating online behavior, not just in their own nation, but worldwide. Google, more than any company, has had a target on its back for this kind of case.

The obvious example would be a court in one nation ordering Google to takedown (“de-index”) search results for users worldwide. This is exactly what happened in the Canadian Supreme Court’s decision in Google Inc. v. Equustek Solutions Inc. (June 28, 2017). This case represents the first time the highest court in a country has ordered a search engine to de-index worldwide in the context of a purely commercial two-party dispute. And, as we shall see below, this is a crucial issue for Google – one that it will not concede without a fight.… Read the full article