Intellectual Property and Tech Law Reports

Judge not convinced by Apple's trade secrets argument, unseals docs

By Jacqui Cheng

A judge has denied Apple's request to keep certain court documents sealed in its copyright infringement case against Mac clone maker Psystar. In a late Tuesday filing, US District Judge William Alsup ordered that portions of the parties' summary judgement be unsealed and filed publicly without any redaction. The ruling came after another judge's comments in September, who argued that Apple had failed to articulate specific reasons for the documents to remain sealed.

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Defending intellectual property in an internet age

By Richard Waters

SpaceX is in a race for its life with the Chinese. The US venture says it has $3bn in orders under its belt, making it one of the early leaders in the commercial space industry. But founder Elon Musk is under no illusions about the existential risk to his business: the Chinese path to success in the commercial space industry, he says, runs over his company’s dead body.

What should a company, or an entire industry, that finds itself in Chinese cross-hairs do? One response at SpaceX, Mr Musk says, has been to avoid seeking patent protection for the company’s most important technology.

This may sound counter-intuitive. Isn’t this just the moment when tech companies should be laying legal claim to their secret sauce? Not at all. To file for patents, says Mr Musk, would be to hand his Chinese rivals “a recipe book”.

The most important stuff stays under lock and key. SpaceX only applies for patents on “things you could observe anyway”, Mr Musk says. It is a paranoia that is evident throughout Silicon Valley.

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Coke secret formula gets 1st new home since 1925

By Harry R. Weber

Associated Press / December 9, 2011

ATLANTA—The Coca-Cola Co. has made its secret formula the centerpiece of a new exhibit at its corporate museum, ditching the confines of the bank vault where the list of ingredients had been stored since 1925.

The world's largest beverage maker said Thursday a new vault containing the formula will be on display for visitors to its World of Coca-Cola museum in downtown Atlanta. However, the formula itself, which dates back to 1886, will remain hidden from view.

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EBay and PayPal sue Google over trade secrets

By Yinka Adegoke | Reuters

NEW YORK (Reuters) - EBay and its online payment unit, PayPal Inc, on Thursday sued Google Inc and two executives for stealing trade secrets related to mobile payment systems.

The two executives, Osama Bedier and Stephanie Tilenius, were formerly with PayPal and led the launch on Thursday of Google's own mobile payment system in partnership with MasterCard, Citigroup and phone company Sprint.

The suit highlights the growing battle by a wide range of companies from traditional finance to Silicon Valley trying to take a major stake in what has been described as a $1 trillion opportunity in mobile payments. The mobile phone is seen as the digital personal wallet of the future.

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Coca Cola's Secret Recipe Allegedly Revealed by Radio Program

Published February 15, 2011 | NewsCore

CHICAGO – A US radio station claims to have discovered the holy grail of soft drinks -- the secret recipe for Coca-Cola, news.com.au reported Tuesday.

The website for Chicago public radio show This American Life states it found a list of ingredients for Coca-Cola, a secret that has been closely guarded for more than a century, in a 40-year-old newspaper.

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Barnes & Noble Fails to End Nook Lawsuit

Published December 28, 2010 | Reuters

Barnes & Noble Inc (BKS) lost its bid to dismiss Spring Design Inc's lawsuit accusing the largest U.S. bookseller of illegally copying a screen design for the popular Nook electronic book reader.

Spring Design will be allowed to pursue claims accusing Barnes & Noble of misappropriating trade secrets, breach of contract and unfair competition, according to a ruling in the federal court in San Jose, California.

The ruling by U.S. District Judge James Ware on Monday evening is a setback for Barnes & Noble, which launched Nook in October 2009 to compete with Amazon.com Inc's (NASDAQ:AMZN) market-leading Kindle. Spring Design sued the next month.

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Muffin Man Enjoined from Working at Hostess

3rd Circuit applies the "substantial threat" test to trade secret case.

By Kayleigh Roberts

Published on 10/1/2010

Chris Botticella accepted an offer to join Hostess Inc. as vice president of bakery operations for eastern Texas in October 2009. He didn’t get around to informing his then-employer, competitor Bimbo Bakeries USA Inc., until January 2010.

[. . .]

"I have no doubt that his behavior had a lot to do with this," says James Gehrke, an associate at Gehrke and Associates and blogger for the firm’s Intellectual Property and Tech Law Reports blog.

Read the full article at Inside Counsel

Ajaxo Inc. v. E*Trade Fin. Corp.

Plaintiff Ajaxo Inc. (Ajaxo), sued defendant E*Trade Financial Corporation (E*Trade) for misappropriation of trade secrets under the California Uniform Trade Secret Act (Civ. Code, §§ 3426-3426.11 (CUTSA)).1 E*Trade‟s liability was established in a prior trial where a jury determined that E*Trade had willfully and maliciously misappropriated Ajaxo‟s trade secrets. (See Ajaxo Inc. v. E*Trade Group Inc. (2005) 135 Cal.App.4th 21, 26 (Ajaxo I).) This matter comes to us following the second trial in which the single factual dispute before the jury was the extent to which E*Trade had been unjustly enriched by its misappropriation.

Under the CUTSA, Ajaxo was entitled to recover damages for its actual loss caused by the misappropriation and also for E*Trade‟s unjust enrichment not taken into account in computing Ajaxo‟s actual loss. (§ 3426.3, subd. (a).) If neither actual loss nor unjust enrichment were “provable,” the trial court had discretion to order E*Trade to pay Ajaxo a reasonable royalty. (§ 3426.3, subd. (b).)2 Electing to pursue damages measured only by E*Trade‟s unjust enrichment, Ajaxo submitted evidence intending to show that E*Trade had been enriched by more than $300 million. The jury rejected the evidence, accepting instead E*Trade‟s data, which showed that E*Trade had lost over $2 million. That is, E*Trade‟s net “enrichment” was less than zero. But when Ajaxo asked the trial court to award reasonable royalties, the court rejected the request, concluding that unjust enrichment was “provable,” there was just “no net amount in terms of actual damages.” Ajaxo argues on appeal that this was error. We agree.

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Clearwater Systems Corp. v. Evapco, Inc.

This is a patent infringement case that commenced as a trade secret dispute between two competitors in the non-chemical water treatment business. Clearwater Systems Corporation (“Clearwater”) brought an action in the U.S. District Court for the District of Connecticut (“district court”) against Evapco, Inc. (“Evapco”), as well as John W. Lane, a former Clearwater employee who was hired by Evapco, and Bullock, Logan & Associates (“Bul-lock”), a marketing consultant that provided marketing services for Clearwater and Evapco. Clearwater sought injunctive relief for alleged theft of trade secrets and other state business law torts. The district court concluded that Clearwater’s allegedly misappropriated information were not trade secrets under the Connecticut Uniform Trade Secrets Act and denied Clearwater’s request for a permanent injunction. Clearwater Sys. Corp. v. Evapco, Inc., No. 3:05-CV-507, 2005 WL 3543717, at *14 (D. Conn. July 26, 2005).

Prior to the resolution of the trade secrets claim, Evapco counterclaimed for a declaratory judgment that its “Pulse-Pure” product did not infringe two of Clearwater’s patents, U.S. Patent No. 6,063,267 (“’267 patent”), disclos-ing an apparatus for non-chemical water treatment, and U.S. Patent No. 6,641,739 (“’739 patent”), disclosing a method of non-chemical water treatment. Evapco also counterclaimed for a declaration of invalidity and/or unenforceability of the ’267 and ’739 patents. In response, Clearwater amended its complaint to assert a claim of patent infringement against Evapco, alleging that the Pulse-Pure infringed the ’267 and ’739 patents.

The parties subsequently submitted cross-motions for summary judgment of literal infringement of the ’267 patent and invalidity of the ’267 and ’739 patents. After hearing arguments relating to the motions, the district court ruled that the ’267 patent is not invalid for anticipation, but concluded that the ’739 patent is invalid because it is inherently anticipated by the ’267 patent. Clearwater Sys., Corp. v. Evapco, Inc., 596 F. Supp. 2d 291, 313 (D. Conn. 2009). Furthermore, the district court ruled that the Pulse-Pure does not literally infringe the ’267 patent and sua sponte ruled that the Pulse-Pure does not infringe the ’267 patent under the doctrine of equivalents. Id. at 302, 308. For the reasons discussed below, we vacate and remand for proceedings consistent with this opinion.

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Bimbo Bakeries USA, Inc. v. Botticella

This matter comes on before this Court on an interlocutory appeal from an order of the District Court dated February 9, 2010, and entered on February 12, 2010, granting appellee’s motion for a preliminary injunction. Bimbo Bakeries USA, Inc. v. Botticella, No. 10-0194, 2010 WL 571774 (E.D. Pa. Feb. 9, 2010). The issue on appeal is whether the District Court erred in enjoining appellant Chris Botticella, formerly a senior executive at appellee Bimbo Bakeries USA, Inc. (“Bimbo”), from working for one of Bimbo’s competitors until after the Court resolved the merits of Bimbo’s misappropriation of trade secrets claim against Botticella. The Court intended that the preliminary injunction would last for about two months until the trial but, because of this appeal and a stay of the District Court proceedings following the filing of this appeal, the preliminary injunction has remained in effect. For the reasons we set forth below, we will affirm the order of the District Court.

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