Employment Litigation Involving Trade Secrets Leveraging the - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Employment Litigation Involving Trade Secrets Leveraging the Inevitable Disclosure Doctrine and Computer Fraud and Abuse Act to Defend Against Employee Misappropriation TUES DAY, FEBRUARY 28, 2012 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: Jason C. S chwart z, Part ner, Gibson Dunn & Crutcher , Washingt on, D.C. Brian Z. Liss, S enior Counsel, Science Applications International Corporation , McLean, Va. Brent M. Timberlake, Direct or and Assist ant General Counsel, Capitol One , Richmond, Va. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Employment Litigation Involving Trade Secrets Febr ebruary 28, 28, 2012 2012 Brian an Z Z. Liss, S Seni nior or C Couns unsel Scienc nce A e Applicat ations ns I Internat national nal C Corp. McLean, an, V VA (70 703) 676 676-2257 257 Bria ian.Z .Z.L .Lis iss@saic ic.c .com Bren ent M M. Timber berlake, D Director, A Assistant nt G Gene neral al C Couns unsel Capi apital al One F e Finan ancial C Corp. p. Richmond, nd, V VA (80 804) 284 284-0846 846 brent nt.timber erlak ake@capi apital alone. ne.com om Jason on C C. Schwar artz Gibson on, D Dunn & n & Crutcher her L LLP Washing ngton, on, D D.C. (20 202) 955 955-8242 242 JSchwar artz@gibs bsondu ondunn. nn.com om

OVERVIEW I. Pre-Litigation Strategies (In-House Perspective) II. Inevitable Disclosure and Other Trade Secrets Case Law Developments III. Computer Fraud and Abuse Act and Criminal Prosecutions DISCLAIMER: This presentation is intended to provide general information only; it is not intended to communicate legal advice. 6

Pre-Litigation Strategies (In House Perspective) 1. Do your offer letters contain representations regarding former employer obligations and information? 2. Do you have written employment policies in place concerning trade secrets and confidential information? 3. Do your employees sign non-compete and confidentiality agreements? 4. Do you have your vendors/business partners sign confidentiality agreements? 7

Pre-Litigation Strategies (In-House Perspective) 5. How do you define trade secrets? 6. Do you keep an inventory of trade secrets? 7. How do you restrict access to trade secrets and confidential information? 8. Do you use passwords to protect electronic information? Locks to protect physical information? 9. Do you train employees regarding trade secrets, confidential information, and computer use policies? 8

Pre-Litigation Strategies (In-House Perspective) 10. What steps do you take to protect trade secrets when a key employee departs? 11. What steps do you take when hiring a key employee from a competitor? 9

Inevitable Disclosure and Other Trade Secrets Case Law Developments • Inevitable Disclosure Doctrine – Used to determine whether to enjoin “threatened misappropriation” under Uniform Trade Secrets Act – Varies by state – Where accepted, tends to require “plus” factors • Dishonesty • Unusually high compensation • Competitive circumstances and timing 10

Inevitable Disclosure and Other Trade Secrets Case Law Developments • Watershed Cases – PepsiCo Inc. v. Redmond , 54 F.3d 1262 (7th Cir. 1995) – Bimbo Bakeries USA Inc. v. Botticella , 613 F.3d 102 (3d Cir. 2010) (“substantial likelihood” of disclosure sufficient) • Failure to disclose job offer to current employer • Accessing confidential information after accepting offer • Downloading information to external storage device 11

Inevitable Disclosure and Other Trade Secrets Case Law Developments • Compilations as Trade Secrets – Design Insights Inc. v. Sentia Group Inc., 416 Fed. App’x. 324 (4 th Cir. 2011) – Tewari De-Ox Systems, Inc. v. Mountain States/Rosen LLC , 637 F.2d 604 (5 th Cir. 2011) – AvidAir Helicopter Supply, Inc. v. Rolls Royce Corp. , No. 10-3444 (8 th Cir. Dec. 13, 2011) 12

Inevitable Disclosure and Other Trade Secrets Case Law Developments • Blockbuster Verdicts – E.I. DuPont de Nemours and Co. v. Kolon Industries, Inc. (E.D. Va.): $920 million – Bryant v. Mattel, Inc. (C.D. Cal.): $310 million – Pacesetter Inc. v. Nervicon Co. (Cal. Super. Ct.): $2.3 billion 13

Computer Fraud And Abuse Act • Provides for criminal and civil liability for unauthorized access to a protected computer system • Often used as “hook” to get UTSA claim heard in federal court • Requires demonstration of at least $5,000 loss 14

Computer Fraud And Abuse Act • Meaning of “authorization” requirement – United States v. Nosal , 2011 WL 1585600 (9th Cir. Apr. 28, 2011) (employee’s access must exceed that permitted by computer use policies) • Pending en banc decision – Platinum Logistics v. Mainfreight, et al. , No. 11-cv-1174 (S.D. Cal. Jan. 18, 2012) 15

Criminal Prosecutions • “Growing and persistent” foreign threat according to U.S. Office of the National Counterintelligence Executive • Economic Espionage Act prosecutions include: • U.S. v. Liu (M.D. La.) • U.S. v. Lin (W.D.N.Y.) • U.S. v. Jhaveri (N.D.N.Y.) • U.S. v. Yu (E.D. Mich.) • U.S. v. Doxer (D. Mass.) • U.S. v. Yang (N.D. Ill.) • U.S. v. Jin (N.D. Ill.) • U.S. v. Huang (S.D. Ind.) 16