DiscoverOrg, a company that provides business-to-business marketing data, sued Timlin Enterprises for copyright infringement. DiscoverOrg provides its marketing information to customers through a password-protected on-line user interface. According to the complaint, a Timlin employee accessed the database while employed by a licensed company, downloaded the data, and took it with him when he moved on to work for Timlin. A second person, meanwhile, who worked with the first accessed the database from their new, licensed company, and the data made its way to the first employee now working for Timlin. DiscoverOrg asserts that Timlin knowingly used the misappropriated data in marketing efforts. In addition to copyright infringement, DiscoverOrg asserts federal and state trade secret misappropriation (the state claim under Washington law, as DiscoverOrg is a Washington-based company), unjust enrichment, tortious interference with contractual relations, negligence for failure to properly train and supervise its employees regarding misappropriation of trade secrets, and violation of Ch. 93A. The case was assigned to Judge Zobel.
B. Luxe, a Medway hair salon, accuses Belmont’s B Luxe Aesthetics and Bianca Jacqueline Paraison of infringing its registered “B. LUXE” trademark in connection with hair and skin products and services. While the complaint does not clarify, it seems that Ms. Paraison is the owner of B Luxe Aesthetics. In addition to federal trademark and unfair competition claims, B. Luxe brings counts for state and common-law trademark infringement and unfair and deceptive trade practices under 93A.
In August, Governor Baker signed a new law governing trade secrets, broadening the types of information that can qualify as a trade secret and setting up protections for trade secrets during litigation. By the passage of this law, Massachusetts joins the vast majority of states in adopting the Uniform Trade Secrets law. Governor Baker also signed a law placing significant restrictions on non-compete clauses in employee agreements, including limits on scope and time and requirements that an ex-employee be compensated during the time the former employee is restricted. A summary of these laws can be found here.
Judge Saylor granted in part SiOnyx’s renewed motion to compel in this patent infringement, correction of inventorship, and breach of contract case. SiOnyx had entered into an agreement with Hamamatsu to explore a possible business relationship surrounding laser-textured infrared-sensing silicon photonic devices. The business relationship never came to fruition, and Hamamatsu subsequently applied for patents directed to similar technology. A discovery dispute arose over whether SiOnyx could obtain information on products that were textured by some means other than a laser, with Hamamatsu taking the position that the infringement contentions did not accuse such products and the former SiOnyx founder now working for Hamamatsu did not contribute to the invention of non-laser-textured devices. SiOnyx’s initial motion to compel was denied without prejudice, because at the time there was insufficient evidence to support a charge of infringement; since then, SiOnyx was able to develop sufficient information that the products infringe, and that an offer for sale of the accused products has been made that, if accepted, would generate significant sales. Judge Saylor found that SiOnyx’s evidence related to the breach of contract and use of confidential information claims (that the Hamamatsu engineers who were exposed to this information developed the non-laser-textured products) was insufficient to overcome the significant differences in the resulting textures that negate an inference that they were developed using SiOnyx’s confidential information. Because the motion was granted only with respect to the patent claims, Hamamatsu was compelled to produce information relating only to U.S. sales or imports.
The patent claims of this multi-claim lawsuit surrounding 3-D metal printing were bifurcated, and a jury trial on the patent claims was held in late July. The jury returned a verdict finding the two asserted patents valid but not infringed. The remaining trade secret, breach of contract, and unfair competition claims will be tried at a later date.
Judge Young denied without prejudice a pair of motions to seal. He noted that the Protective Order entered in the case governs only inter-party disclosures, and cannot provide the basis for filing a document under seal with the court. This case, which involves claims of misappropriation of trade secrets relating to metal 3D printing in connection with the hiring of a former Desktop Metal employee as well as patent infringement claims, was filed in March of 2018, with a motion for preliminary injunction, based on the asserted patents, filed shortly thereafter. In keeping with his typical approach, Judge Young collapsed the motion with an early trial, which he scheduled for July. Markforged then filed counterclaims alleging that Desktop Metal’s founders themselves took Markforged trade secrets with them when they started the company. Desktop Metal sought to bifurcate and try only the patent claims in the July trial, or to allow an expedited hearing on its motion for preliminary injunction, citing the “morass” of additional factual and legal elements from the counterclaims that would make the targeted July trial date unworkable. The motion was denied without prejudice, as was a motion to continue the trial to later in July. A series of motions to dismiss were denied (although Judge Young did note that many of the affirmative defenses seemed to be mere boilerplate, “interposed for the purpose of delay”), meaning a complex litigation involving patents, trade secrets, contractual and other state law claims may well run only four months. One should always be aware that, when appearing before Judge Young, there is a strong chance of a quick trial if preliminary relief is sought.
Protecting Intellectual Property in the Post-AIA World
Over the past few years, trade secrets have gained stature as a means to protect intellectual property in America. With the continuing pressure on patent protection, the ever-increasing ease of copying and misappropriating information, and the creation of new trade secret laws in the United States, the importance of understanding and successfully implementing trade secret protection has never been more important. On Thursday, February 15 at 11:00 EST, I will be presenting a webinar discussing recent developments in trade secret law and the steps that should be taken to ensure your secrets remain protected. Topics that will be discussed include:
• The overlap between trade secret protection and patent protection
• Best practices for protecting information from misappropriation
• Successfully licensing trade secret information
• Trends in the application of the Defend Trade Secrets Act that created a federal cause of action for trade secret misappropriation
I would love to have you join – please click here to register.