Trade Secret Litigation

At the most basic level, a trade secret is anything that provides a competitive advantage or provides value because of its proprietary nature.  Your business may have trade secret rights in manufacturing processes, information derived from research and development, customer lists, methods of bookkeeping, business plans or designs, computer programs, and pricing and cost information.  Unlike many other forms of IP protection, there is no government registration system for obtaining or enhancing trade secret rights. 

Trade secret disputes can arise when employees with knowledge of your trade secrets leave to work for a competitor, or as the result of a partnership gone bad, or even as the result of “industrial espionage” by your competitors.  Because trade secrets derive their value from the vigilance with which their secrecy is protected, it is often crucial to act quickly when a potential trade secret violation has or is about to occur.  Litigation in the state and/or federal courts may be the only mechanism for acting quickly enough to prevent the disclosure or use of your trade secrets.  In particular, a temporary restraining order or preliminary injunction can be an effective tool to maintain the status quo while the dispute is resolved.  W|N has the expertise and experience to help you obtain relief in the courts.

Alternatively, if your competitors threaten you with a claim for theft of trade secrets, W|N also has the ability to successfully defend you in court.   

Here are some of our recent successes in trade secret cases:

Zrii v Wellness Acquisition Group, LLC, Case No. 4374-VCP (Del. Ch.)
Members of the executive team and top distributors of our client, Zrii, conspired together to force Zrii’s owner to sell the business.  When the owner refused, the defendants recruited many of Zrii’s employees and distributors to one of Zrii’s competitors, placing at risk many of Zrii’s trade secrets.  W|N lawyers brought an action in Chancery Court in Delaware and obtained a preliminary injunction against the defendants.  W|N lawyers also coordinated a separate action in California against the competitor, which resulted in the competitor’s agreement to be bound by the injunction and payment of a significant monetary settlement.  

Astrum, Inc. v. Novell, Inc., Case No. 2:08-cv-00201 (E.D.Tex.)
A former employee and a distributor for Novell teamed up to form Astrum, Inc. to develop a computer security appliance based on the SUSE Linux software distributed by Novell.  When Novell would not promote the Astrum appliance, Astrum sued Novell for trade secret misappropriation and breach of contract, and filed a motion to enjoin Novell from selling SUSE Linux and other security applications developed by Novell.  The court granted W|N’s request for limited discovery in relation to Astrum’s preliminary injunction motion.  W|N obtained document discovery from Astrum that disproved Astrum’s trade secret claim, and during depositions of the Astrum principals, W|N obtained critical admissions that led Astrum to settle the case and dismiss its claims on terms that were highly favorable to Novell.   

Steamway Corporation v. The Clorox Company, Case No. 1:09-CV-0991 DFH-DML (D. Indiana)
Plaintiff filed a complaint in state court asserting that it had disclosed trade secrets to Clorox and that Clorox had misappropriated those trade secrets.  W|N removed the case to federal court and filed the first of two motions to dismiss.  The first motion to dismiss was mooted by the filing of an amended complaint, but while W|N’s second motion to dismiss was pending, which asserted that the complaint was still defective, W|N and it client, Clorox, were able to settle the case on terms very favorable to Clorox.

Medspring Group v. Feng, Case No. 1:05-CV-42 (D. Utah)
When our client was sued in Utah state court for an alleged violation of trade secret law, W|N succeeded in getting the case removed to federal court and defeating the plaintiff’s motion for a preliminary injunction.  The case settled favorably for our client shortly thereafter.

C Innovation, Inc. v. Uhler , Case No. 090408193 (Utah 3d Dist.)
In April 2009, W|N obtained a temporary restraining order and a preliminary injunction against the defendants in Utah state court on trade secret and related breach-of-contract claims and subsequently defeated a motion for leave to file an interlocutory appeal to the Utah Court of Appeals.  The case is still pending.