Tag Archives: Intellectual property

Northern District Dismisses UTSA Cause of Action for Source Code Partially Filed With Copyright Office

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The Northern District dismissed a California Uniform Trade Secrets Act (UTSA or CUTSA) cause of action in a software code distribution case for failure to adequately allege secrecy. Kema, Inc. v. Koperwhats, No. C-09-1587 MMC, 2010 WL 3464708 (N.D. Cal. Sept. 1, 2010) (slip op.). Continue reading

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Northern District Notes That Trade Secret Law Allows Recovery of Saved Development Costs

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In a non-trade secrets intellectual property case, The Northern District of California noted, in dictum, that “trade secret law allows recovery of saved development costs.”  Oracle Corp. v. SAP AG, No. C 07-1658 PJH, — F.Supp.2d —-, 2010 WL 3258603, *14 (N.D. Cal. Aug. 17, 2010). Continue reading

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Implementing a Trade Secret Protection Program

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Metropolitan Corporate Counsel has an interview with Alan Gutterman regarding how to implement a trade secret protection program.  Gutterman recites some of the common elements to such a program:

[A]doption of security measures to mark trade secrets, thus, identifying what is or is not considered to be confidential. The programs also include segregation of trade secret information and limitation of access to the trade secret owner or other authorized personnel. I also recommend that a program places employees on notice that the company maintains confidentiality of its trade secret information and that each employee has a duty to assist in protecting such items. Continue reading

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Is Trade Secret Protection Better Than a Patent?

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R. Mark Halligan has published an excellent article in the American Bar Association’s Landslide.

Since every patent starts out as a trade secret, Mr. Halligan discusses whether, given the trends in patent law, it makes sense for the holder of a trade secret to pursue patent protection.

Patent applications face a Catch-22 in pursuing patents.  By “pursuing patent protection unsuccessfully, the inventor has lost both patent protection and trade secret protection because the business method is now in the public domain. This is the ‘Catch-22’ with any patent application disclosed to the public during the USPTO patent prosecution proceedings in the United States. The moment the patent application is published, any trade secret rights in the patent application are vitiated. Then if the patent does not issue, the inventor has lost all proprietary protection. In hindsight, the inventor would have been better off keeping the commercially valuable information secret if patent protection is uncertain.”

Today patents are harder to get and harder to defend.  Halligan discusses how in light of recent patent law cases, the scale has now tipped in favor of pursuing a trade secrets strategy over pursuing a patent application.  See, e.g., In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d (BNA) 138 (Fed. Cir. 2008); KSR Int’l Co. v. Teleflex, Inc., 127 S. Ct. 1727 (2007); Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997); In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007).

Mr. Halligan concludes that:

it is now time for the intellectual property bar to revisit the decision whether to protect commercially valuable information as a trade secret asset or a patent asset. In recent years, decisions by the U.S. SupremeCourt and other developments in the law have circumscribed the once broad protection afforded to patent holders as well as remedies available to patent holders. Upon consideration of all the issues discussed in this article, the protection of such assets as trade secrets may provide a better choice for your clients in today’s environment.

By CHARLES H. JUNG

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Mere Reference to Patent Does Not Confer Federal Jurisdiction Over UTSA Claim

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In this next case, Judge James Lorenz of the Southern District of California runs through a federal question analysis and concludes that Plaintiff’s mere reference to the fact his intellectual property is patented does not convert a state law UTSA claim into a federal question that can impart original jurisdiction in the federal courts.  Markey v. Verimatrix, Inc., 2010 WL 2976164 (S.D. Cal. July 22, 2010) (slip op.).

A careful review of plaintiff’s misappropriation of trace secret claim as found in the complaint does not suggest a basis for federal jurisdiction. The issue presented for decision is not whether plaintiff’s patents are valid or invalid or are or are not being infringed but whether his intellectual property was misappropriated. Mere reference to the fact that plaintiff’s intellectual property was patented does not turn on a substantial question of federal law. Plaintiff is not seeking to prove his trade secrets are protected under federal patent law and that defendant infringed on the patent. And the Court is not called to determine in any manner the scope and meaning of plaintiff’s patent in order to consider the alleged trade secret misappropriation. The misappropriation of trade secret claim does not ‘turn on substantial questions of federal law,’ and does not ‘really and substantially involv[e] a dispute or controversy respecting the validity, construction or effect of [federal] law.’ “ Williston Basin, 524 F.3d at 1102. Instead, the sole remaining claim in the complaint is based solely on California law. As a result, the Court does not have original jurisdiction over plaintiff’s claim.

By CHARLES H. JUNG

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