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America’s Most Secretive Companies

In Fun with Trade Secrets on August 30, 2010 at 7:40 am
SALT LAKE CITY - DECEMBER 8:  Former Blackwate...

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The key element of a trade secret is, of course secrecy.  As defined in the California Uniform Trade Secrets Act (“UTSA”), a trade secret is means “information, . . . that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Some companies are better than others in maintaining secrecy.  Last Friday, 24/7 Wall St. ranked the companies that, in its view, are America’s most secretive:

1. Apple, Inc.

2. Xe Services LLC (f/k/a Blackwater Worldwide)

3. Renaissance Technologies

4. Google Inc. Read the rest of this entry »

Judge William Alsup Warns Litigants in Golf Club Case: “No mulligans on summary judgment or discovery will be permitted. Both sides must be ready to come out swinging.”

In Fun with Trade Secrets on August 21, 2010 at 11:57 am
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In Swingless Golf Club Corp. v. Taylor, No. C 08-05574 WHA, — F. Supp. 2d —-, 2010 WL 3081255 (N.D. Cal. Aug. 6, 2010), plaintiff claims patent infringement, misappropriation of trade secrets, unfair competition under Section 17200 of the California Business and Professions Code, violation of the Lanham Act, 15 U.S.C. 1125(a), and breach of contract related to the “swingless” golf club.  At the heart of the dispute is a golf club that is a:

pyrotechnic device that uses explosive charges, a wedge-shaped piston, and a trigger to blast golf balls hundreds of yards down a fairway. Designed for golfers who cannot (or would rather not) swing, this intriguing invention– which looks like a traditional golf club except that it is loaded with gunpowder . . . . Read the rest of this entry »

Kaedar Electronics’ Parent Company Suspends a Manager Accused of Paying Kickbacks to Apple Employee in Misappropriation of Trade Secrets Case

In Criminal Theft of Trade Secrets, Fun with Trade Secrets, International on August 18, 2010 at 5:17 am
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Ting-I Tsai of The Wall Street Journal reports that Pegatron Corp., the parent company of Kaedar Electronics Co., said it had suspended a manager who has been accused of paying kickbacks to Paul Devine, an Apple employee.  Pegatron says it is now investigating whether the manager violated the company’s code of conduct.  The company is reportedly working on an iPhone for a second mobile standard for Apple.

Neither Pegatron Corp. nor Kaedar Electronics Co. were named as defendants in the civil suit filed by Apple Inc. on Friday.

If Apple truly believed that confidential information and trade secrets were misappropriated by Devine and Kaedar Electronics, one would expect that Kaedar would be brought in as a party.   Read the rest of this entry »

Kaedar Electronics Acknowledges Paying Brokerage Commission in Apple Trade Secret Theft Case

In Breaking News, Criminal Theft of Trade Secrets, Fun with Trade Secrets on August 17, 2010 at 3:21 am
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Ting-I Tsai of the Wall Street Journal reports that the parent of Kaedar Electronics Co. “acknowledged Monday that Kaedar did pay brokerage commission to an intermediate trading company for its business with Apple between 2005 and 2008. But it said it is not sure if the arrested Apple employee is behind the intermediate trading company.”

Apple’s Complaint alleges that “[f]rom at least March 2008 through the filing of this Complaint, Devine demanded and received illicit payments, kickbacks, bribes and other things of value from Kaedar and, in exchange, Devine provided Kaedar with Apple’s Confidential Information.”  Complaint ¶ 51.  “With Apple’s Confidential Information, Kaedar was able to construct offers to Apple on terms more favorable to Kaedar, and less favorable to Apple.”  Id. ¶ 58.

UPDATE:  Kaedar Electronics Suspends Manager

By CHARLES H. JUNG

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Breaking News: Apple Sues Its Own Global Supply Manager for Misappropriation of Trade Secrets

In Breaking News, Criminal Theft of Trade Secrets, Fun with Trade Secrets, Trade Secrets News on August 16, 2010 at 8:45 pm
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Apple Inc. filed suit on Friday against one of its Global Supply Managers alleging that he had “abused his position, violated Apple policies, and broken the law by stealing Apple’s proprietary, trade secret and other confidential information and converting it to his own benefit.”   Complaint ¶ 1.  The case is Apple Inc. v. Devine, et al., CV10-03563 PVT (N.D. Cal. Aug. 13, 2010).  Defendants are Paul S. Devine and CPK Engineering, Inc.  Apple alleges that it paid Devine over $614,000 in salary and $51,076 in bonus compensation and issued him 4,500 Apple stock options and 900 shares of Apple restricted stock.

Shannon Henson at Law360 reports that Apple served Devine on the day he appeared in court on charges of wire fraud, conspiracy, money laundering and engaging in monetary transactions with criminally derived property.

Apple claims that it investigated Devine since April 2010, and during the course of that investigation, discovered an “Entourage database and cache of e-mail from Devine’s personal Hotmail and Gmail e-mail accounts stored on Devine’s Apple-supplied laptop hard drive.”  Id. ¶ 16.  “These e-mails also confirmed that Devine had demanded and received over a million dollars in illicit payments, kickbacks, bribes, and other things of value (which Devine sometimes refers to in e-mail correspondence as ‘samples’) from numerous suppliers, and had concealed his scheme from Apply over the course of several years.”

Apple alleges 12 separate causes of action (the complaint was carefully pled, but several of the causes of action are likely susceptible to dismissal on a 12(b)(6) motion).

UPDATE: Kaedar Electronics Acknowledges Paying Brokerage Commission

UPDATE: Kaedar Electronics Suspends Employee

Judge and Attorneys

The case has been assigned to Magistrate Judge Patricia V. Trumbull of the Northern District of California.

Attorneys for plaintiff Apple Inc. are George A. Riley, Sharon M. Bunzel, Aaron M. Rofkahr, and Jean B. Niehaus of O’Melveny & Myers in San Francisco.

The criminal case is U.S. v. Devine, case number 10-cr-00603, in the U.S. District Court for the Northern District of California.

The civil suit is Apple Inc. v. Devine et al., case number 10-cv-03563, in the same court.

By CHARLES H. JUNG

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Counterpunch! Countersuit in UFC Trade Secrets Case

In Fun with Trade Secrets, Trade Secrets News on August 13, 2010 at 4:14 pm

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Kris Karkoski reports that, after being sued by the UFC for allegedly acquiring trade secrets, Bellator has filed a cross-complaint against the UFC.  Bellator apparently accuses the “UFC of casting Jonathan Brookins to The Ultimate Fighter 12 while the lightweight was still under contract with Bellator.”

By CHARLES H. JUNG

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Crocs Settles Trade Secrets Misappropriation Suit Brought by Columbia Sportswear

In Fun with Trade Secrets, Settlements on August 5, 2010 at 11:02 am
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Columbia Sportswear settled a trade-secrets lawsuit against Crocs.  The suit stemmed from Crocs’s hiring a Columbia employee as an independent contractor.  Columbia alleged claims of misappropriation of trade secrets, intentional interference with contract, and aiding and abetting the employee’s breach of his duty of loyalty to Columbia.  Read a report from the Denver Post here.

By CHARLES H. JUNG

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Third Circuit Upholds Injunction: Twinkies Will Not Yet Be Crunchy on the Outside and Soft in the Middle

In Fun with Trade Secrets, Trade Secrets News on July 28, 2010 at 10:53 pm
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The federal Third Circuit Court of Appeals upheld an injunction yesterday blocking an expert on nooks on crannies from jumping to rival Hostess Brands, Inc.  The case is Bimbo Bakeries USA Inc v. Botticella, U.S. 3rd Circuit Court of Appeals, No. 10-1510.   Michael L. Banks of Morgan, Lewis & Bockius LLP and Joseph Anclien of Schnader Harrison Segal & Lewis LLP appeared for oral argument.

By CHARLES H. JUNG

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