Trade secret disputes and misappropriation claims are on the rise and the size of trade secret verdicts are increasing at an astonishing rate.  Trade secrets are often essential to a business’ success, and it is imperative that businesses protect and exploit that information appropriately. Sheppard Mullin assists clients to do exactly that, across a variety of industries including technology, life sciences, entertainment and media, healthcare, financial services, hospitality and leisure, fashion, retail, manufacturing, defense, and marketing and sales.

Our lawyers “wrote the book” on trade secrets.  Sheppard Mullin partner Rebecca Edelson edited the leading treatise, “Trade Secret Litigation and Protection in California,” and four Sheppard Mullin lawyers are chapter authors.

Sheppard Mullin regularly counsels clients on protecting their trade secrets, know-how, and other proprietary information from misappropriation.  However, should litigation become necessary to recover that information, e.g., from employees or competitors, we are prepared to advance our clients' interests.  Whether a client is the trade secret holder, or the target of a misappropriation claim, our objective is to identify and secure the best resolution for the client with as little disruption to its business as possible.

Our attorneys also work with clients to identify whether a valuable intellectual property asset is best protected as a trade secret, and whether patent or copyright protection is available or more appropriate to protect all or part of the asset.  Identifying these issues from the outset is critical.  If the incorrect form of protection is selected, it can mean the loss of the asset’s value.  Our interdisciplinary trade secret team helps clients make the most informed decisions regarding the protection of their intellectual property assets. 

We have seasoned litigators who routinely prosecute and defend trade secret misappropriation and related claims, such as breach of nondisclosure agreements (NDAs) and/or restrictive covenants, unfair competition and breach of fiduciary duty, among others.  Importantly, our attorneys are adept in obtaining restraining orders and injunctions to protect clients' rights, and in defending similar actions brought by clients' adversaries.  We are able to mobilize on very short notice to present the most persuasive case on behalf of our clients.  Such expertise is critical because, as a practical matter, injunction proceedings often decide the outcome of the litigation.  In addition, our attorneys understand the importance of guarding against the disclosure of trade secret information during the litigation process to ensure that it does not fall into the public domain or competitors’ hands.

Federal forums are becoming an increasingly popular venue to address trade secret disputes.  The 2016 Defend Trade Secrets Act offers a federal civil claim as relief for misappropriation.  That Act adds to the arsenal trade secret holders have to enforce their rights.  Other potential federal weapons include the Computer Fraud and Abuse Act and the Economic Espionage Act.  Unlike many trade secret lawyers whose practices are confined to state court, our lawyers routinely practice in federal court, as well as state court.

More and more frequently, trade secret disputes are presented at the International Trade Commission (ITC) in Section 337 proceedings.  We have lawyers who have the wherewithal and know-how to successfully and efficiently advocate for our clients in that forum.

Criminal proceedings related to trade secret theft are also on the rise.  We have experienced lawyers who are prepared to defend our clients against such claims and to resolve them efficiently.

Litigation

Our attorneys handle trade secret cases in state and federal courts across the country.  Representative matters include:

• Representing scientific research plaintiff in action against biopharmaceutical company for fraud, breach of contract and misappropriation of trade secrets related to medical compound development.
• Represented a national manufacturing company in an unfair competition, trade secret, and employee raiding case, which resulted in a preliminary injunction in favor of client against a former employee and competitor.
• Represented a prime defense contractor against a subcontractor’s claims for trade secret misappropriation and breach of contract related to certain weapons systems.  Case settled favorably on the eve of trial.
• Represented a geospatial solutions provider in trade secrets misappropriation case, which resulted in a widespread temporary restraining order sidelining departing employees and preventing misappropriation.
• Represented an office supply manufacturer in a three-month jury trial in which a competitor sought damages for trade secret misappropriation and unfair competition.  The jury returned a defense verdict, finding no misappropriation.  The case settled on appeal.
• Represented a national healthcare company in a non-compete and trade secret case, which resulted in a temporary restraining order against our client’s former employee and competitor.
• Secured an indefinite temporary restraining order on behalf of a national security services firm against five defendants prohibiting the use or disclosure of confidential information and imposing strict prohibitions on solicitation of employees and customers in a restrictive covenant and trade secrets case.
• Obtained an indefinite temporary restraining order on behalf of client against competitor and former employee prohibiting solicitation of employees and customers in a restrictive covenant and trade secrets case.
• Secured complete and immediate dismissal of declaratory judgment action against client by competitor and five former employees seeking declaration that restrictive covenants were unenforceable.
• Successfully dissolved ex parte temporary restraining order issued against client and newly hired employee for enforcement of a restrictive covenant.
• Obtained a temporary restraining order and preliminary injunction against former employee and competitor on behalf of a national security services firm in a non-compete case.
• Represented a national software development company in a non-compete and employee raiding case, which resulted in a temporary restraining order and preliminary injunction against the client’s former employees and competitor.
• Obtained temporary restraining order and preliminary injunction against client’s former executives and their current employer on behalf of a publicly traded homewares retailer in a trade secrets case.
• Represented a chromatography solutions provider in a high-tech trademark, trade secret, and domain name infringement case involving dynamic light scattering technology used to measure the size and distribution of molecular particles in liquid solutions.  Prevailed on summary judgment and secured an award of attorneys’ fees and punitive damages for our client.  Affirmed on appeal.
• Represented geolocating technology provider in trade secret and breach of license matter addressing Internet advertising practices.
• Represented an aerospace and industrial products manufacturer in a trade secret misappropriation case involving ring laser gyroscope-based inertial navigations systems for aircraft.
• Represented a major defense contractor against trade secret misappropriation claims by the client’s competitor involving avionics and graphic user interfaces for fighter aircraft.  Case was settled favorably for client.

Counseling and Advice

Representative matters include:

• Develop trade secret protection programs, including
• Policies and practices to protect confidential information, such as security measures to prevent “hacking” into electronic files
• Screening processes to ensure that competitive hires do not violate the rights of prior employers
• Assessment of legal risks of proposed competitive hires, and strategies for avoiding disputes
• Training managers to enforce company policies to protect confidential information
• Educating employees about the importance of protecting the company’s trade secrets, including how to protect them and monitor for perceiving misappropriation
• Use of appropriate restrictive covenants and NDAs
• Exit protocols to reinforce with departing employees their continuing legal obligations
• Responding to perceived or potential misappropriation
• Conduct trade secret audits
• Prepare NDAs and restrictive covenants for transactions (e.g., mergers, purchases/sales, technology transfers, joint ventures, strategic alliances)
• Negotiate trade secret licenses and development agreements
• Advocate on behalf of clients to persuade government agencies not to release trade secret information to members of the public who requested access

Speaking Engagements

• “Hot Topics in Trade Secret Litigation: the DTSA, Remedies, Anti-SLAPP, and Constitutional Issues,” Rebecca Edelson, 43rd Annual IP Institute, California Lawyers Association, November 8, 2018
• “Developments in Trade Secrets Laws in the U.S., U.K. and E.U.,” Kevin Cloutier, Sheppard Mullin and Bird & Bird Roundtable, October 2018
• “Tips on Drafting Restrictive Covenants and Litigating Restrictive Covenant Claims," Kevin Cloutier and Shawn Fabian, Lawline CLE Program, June 2018
• “U.S. Trade Secret Litigation Trends, Following the NAND Flash Memory Case,” Seong Kim, Sheppard Mullin Trends in Intellectual Property Seminar, January 18, 2018
• “Trade Secrets, Contractual Limits and International Arbitration,” Robert Friedman, Indo-American Chamber of Commerce Seminar, February 16, 2018
• “The Defend Trade Secrets Act at One Year: How Courts Have Interpreted the DTSA and Reconciled it with the Uniform Trade Secrets Act(s) and Non-Compete Law,” Kevin Cloutier, Sheppard Mullin Labor & Employment Law Update, May 23, 2017
• “Essential Non-Compete and Trade Secret Law: A Practical Guide to Talent Management,” Stephen Fox, University of Texas School of Law CLE, September 2016
• “Trade Secret Protection: A Practical Guide to In-house Lawyers," Seong Kim, In-House Counsel Forum and Korea In-House Counsel Association, September 6, 2016
• “Protecting Trade Secrets in the Cloud,” Kevin Cloutier, First Chair In-House Annual Conference, August 31, 2016
• "The Defend Trade Secrets Act of 2016," Seong Kim, In-House Counsel Forum and Korea In-House Counsel Association, July 14, 2016
• “Trade Secret Misappropriation,” Seong Kim, In House Counsel Forum, November 2015
• “Hot Topics in Trade Secret Law,” Rebecca Edelson, State Bar of California, July 14, 2015
• “Protecting Trade Secrets and Confidential Information: The Threat From Within,” Kevin Cloutier, Sheppard Mullin Seminar, June 17, 2015
• “Protecting Intellectual Property Assets - Using and Enforcing Restrictive Covenants (Non-Compete Agreements) In Texas,” Stephen Fox, Dallas HR Legal Exchange Conference, June 9, 2015
• “Available Remedies for Trade Secret Misappropriation and Patent, Copyright and Trademark Infringement,” Seong Kim, Asociacion Internacional para la Proteccion de la Propiedad Intelectual, March 2015

• Visit our Intellectual Property Law Blog
• Visit our Labor and Employment Law Blog
• Do NOT Give NDAs the Short Shrift, April 5, 2019
• OH SNAP! Supreme Court to Take on Meaning of Key FOIA Exemption, April 2, 2019
• New Massachusetts Law Limits Non-Competes, August 13, 2018
• Utah and Idaho Limit Non-Competes and Vermont and Pennsylvania Work to Ban Them, May 9, 2018
• UPDATE:  The Federal Defend Trade Secrets Act vs. The California Uniform Trade Secrets Act, March 26, 2018
• New Jersey Proposes to Drastically Restrict the Use of Non-Compete Agreements, December 6, 2017
• Lessons Learned:  Tips on How to Allege and Argue Trade Secret Misappropriation at a Preliminary Injunction Hearing, August 30, 2017
• For Your Consideration:  Recent State-to-State Developments on Sufficient Consideration for Employee Non-Compete Agreements, March 27, 2017
• Illinois Limits Non-Compete Agreements Yet Again, September 7, 2016
• Compilation of Public Data Can be Trade Secret, August 12, 2016
• The Federal Defend Trade Secrets Act vs. The California Uniform Trade Secrets Act, July 21, 2016
• The Defend Trade Secrets Act – Coming to a Federal Court Near You, May 9, 2016
• Pennsylvania Appellate Court Finds Uniform Written Obligations Act Inapplicable to Covenants Not to Compete, June 4, 2014
• Federal Jury Finds Executive Recruiter Guilty Stealing Trade Secrets From Former Employer In Order to Start Competing Business, May 1, 2013
• California Appellate Court Upholds Stipulated Injunction Prohibiting Solicitation of Customers and Rejects After-The-Fact Effort to Show that Customer Nonsolicit Violated California’s Ban on Noncompetes, October 15, 2012
• California Court Of Appeal Refuses To Enforce Non-Compete Against Selling Shareholder, September 4, 2012
• Recent Virginia Supreme Court Decision Marks a Steady Shift in the Law Governing Noncompete Agreements, November 28, 2011
• Wax This! New York Court Finds Restrictive Covenant In Hair Removal Specialist’s Employment Agreement Unreasonable and Unenforceable, September 26, 2011
• Coping with Confidentiality Agreements, April 13, 2011
• Information Sharing On The Internet May Mean Fewer Confidential Trade Secrets, October 20, 2010
• California Court of Appeal Clarifies What Constitutes “Use” of a Trade Secret, June 21, 2010
• California Court Takes On Trade-Secret Preemption of Other Civil Claims, May 21, 2010
• California Court Of Appeal Doubts Viability Of “Trade Secrets” Exception For Covenants Not To Compete, November 25, 2009
• Employers Should Carefully Consider Whether To Sue Former Employees For Threatened Trade Secret Misappropriation Based On Recent California Court of Appeal Decision Awarding Over $1.6 Million To Former Employees, June 19, 2009
• Does Edwards v. Arthur Anderson Bar The Use of Employee Confidentiality Agreements?, June 19, 2009
• Employers Should Carefully Consider Whether To Sue Former Employees For Threatened Trade Secret Misappropriation Based On Recent California Court of Appeal Decision Awarding Over $1.6 Million To Former Employees, June 18, 2009
• Recent Federal District Court Ruling Provides Insight Into How To Draft An Enforceable Intellectual Property Assignment Provision In An Employment Agreement, June 4, 2009
• California Court of Appeals Rejects Anti-SLAPP Motion in Trade Secrets/16600 Case, May 13, 2009