I appeared today in the United States Bankruptcy court on a motion I filed to have a lawsuit dismissed against my client. I represent a man who owned a corporation involved in the manufacturer of Mexican foods that filed for Chapter 11 bankruptcy protection. The bankruptcy judge ordered a Trustee be appointed and liquidate the company. Included in the sale were the recipes the Debtor used while operating the business.
The new buyers were disappointed with their sales and sued my client and their chief competitor claiming that my client must have taken these recipes they claimed were trade secrets and conspired with their competitor to unfairly compete in the sale of certain items of Mexican foods.
During that state court action I wrote a letter challenging their allegations and questioning whether they even had clear title to some of these recipes based upon the facts as I knew them. Based upon this letter, the new buyers filed a new lawsuit against my client in the bankruptcy court seeking an order declaring the parties rights to these recipes and an injunction.
I filed a motion to dismiss this lawsuit claiming there was no issue for the court to determine and therefore no controversay. Without a case or controversay the federal court had no jurisdiction. I also argued that any letter I wrote arising out of the state court lawsuit was subject to an absolute litigation privilege.
The bankruptcy judge agreed with me and dismissed the lawsuit without leave to amend.
Justice prevailed.
Posted in Business Litigation, Intellectual Property, Trade Secret |
In order to prevail on a claim that someone stole or misappropriated (as used in legal jargon) your trade secret you not only have to prove the trade secret was subject to efforts to keep it secret, you also have to show it had economic value to people other than yourself.
A recent case called Yield Dynamics held that if the defendant being sued for taking another’s trade secret, can demonstrate that the information that is the subject of the trade secret lacks value to anyone beyond the parties themselves the case will be thrown out. Essentially the party claiming the trade secret must show the secret information gave the owner a competitive advantage.
In Yield Dynamic the trade secret was a computer software source code. Yield Dynamic failed to show the source code could have been exploited by the defendant to the disadvantage of Yield Dynamic. If the information taken lacks value to anyone beyond the parties themselves and provides no competitive advantage the trade secret claim will fail.
Located in Los Angeles, California, Robert G. Klein, Esq. is a Los Angeles trademark infringement attorney who concentrates on business litigation. He emphasizes on trademark infringement, unfair competition and trade secret litigation. Los Angeles trademark infringement lawyer Robert G. Klein has acted as lead counsel in approximately 60 trials. He has successfully obtained many multi-million dollar jury verdicts. Many of Mr. Klein’s court decisions have been published as case authority and he has appeared before the United States Supreme Court for oral argument. Mr. Klein has also published “Consumer List: Trade Secret or Fair Game?”, which is an article published in the Los Angeles Lawyer Magazine. Los Angeles trademark infringement attorney Robert G. Klein can be reached at (213) 996-8508 or visit our web site at http://www.kleinlitigation.com
Posted in Business Litigation, Intellectual Property, Trade Secret |
Customer lists is an area of trade secret law that is often heavily litigated. In order for a customer list to qualify as a trade secret it must contain information that provides a business with a “substantial business advantage” where the disclosure of that information would allow a competitor to direct sales to those customers who have already shown a willingness to use a unique type of service or product as opposed to a list of people who only might be interested.
In a often cited California case involving a roofing company whose sales manager quit and formed a competing business the court found the customer list was a trade secret. The court’s conclusion that plaintiff’s customer list satisfied the statutory definition of “trade secret” was proper, based on the court’s findings that plaintiff provided a relatively unusual roofing service, that the list was a compilation, developed over the years, of names, addresses, and contact persons, that the identity of those particular buildings using services such as plaintiff’s was not generally known in the industry, and that plaintiff had made reasonable efforts to maintain the secrecy of its customers’ identities.
It often boils down to the amount of effort it has taken to weed out customers who are inclined to buy your goods or use your services. If the names are readily available or little effort is involved in obtaining the customers, the chance is the customer list is not a trade secret.
Located in Los Angeles, California, Robert G. Klein, Esq. is a Los Angeles trademark infringement attorney who concentrates on business litigation. He emphasizes on trademark infringement, unfair competition and trade secret litigation. Los Angeles trademark infringement lawyer Robert G. Klein has acted as lead counsel in approximately 60 trials. He has successfully obtained many multi-million dollar jury verdicts. Many of Mr. Klein’s court decisions have been published as case authority and he has appeared before the United States Supreme Court for oral argument. Mr. Klein has also published “Consumer List: Trade Secret or Fair Game?”, which is an article published in the Los Angeles Lawyer Magazine. Los Angeles trademark infringement attorney Robert G. Klein can be reached at (213) 996-8508 or visit our web site at http://www.kleinlitigation.com
Posted in Business Litigation, Trade Secret |
