Trade Secret Litigation
Pollard PLLC represents businesses and entrepreneurs who have had their trade secrets misappropriated as well as individuals and competing companies that stand accused of theft of trade secrets. The firm has significant experience litigating and resolving trade secret disputes in numerous industries, including medicine, software, construction, transportation and more. The firm’s principal, Jonathan Pollard, is routinely quoted in state and national media on trade secret issues. He has taught continuing legal education courses on trade secret litigation to other attorneys. Some of our recent representations include:
- Gear Up With CPR, Inc. et. al. v. CPR Code, LLC et. al. (E.D.N.Y. 2021): Defending CPR training company and its principal against misappropriation of trade secret and fiduciary duty claims. Plaintiff’s bid for an emergency injunction and seizure order was resolved with no injunction and agreement to return any documents/materials in Defendants’ possession.
- All Star Recruiting v. Ivy Staffing et. al., 21-62221 (S.D. Fla. 2021) (defending healthcare staffing company, its principal, and certain employees against non-compete and trade secret claims)
- Application Development Consultants, LLC v. Robert Appell, 19-CA-2334 DIV L (Hillsborough County, FL 2019) (defending C-level executive against claims for misappropriation of trade secrets and breach of fiduciary duty)
- Federated National Holding v. Prygelski, 17-004342 (Broward County 2017): Denying publicly traded company’s bid for injunction against former CFO in non-compete and trade secret matter.
- American Registry vs. Hanaw et al, Case No. 2:13-cv-00352 (MDFL 2013): This case involved a dispute between two rivals in the award plaque industry. We represented the defendants. Hanaw worked for American Registry before leaving the company to start his own competing venture. He did not have a non-compete agreement but did sign a non-disclosure agreement. After Hanaw established his own company, American Registry sued Hanaw, his new companies and a business partner. The plaintiff alleged that Hanaw had breached his non-disclosure agreement and misappropriated a litany of corporate trade secrets. We successfully obtained dismissal of an early complaint for failure to state a claim under Twombly. Plaintiff then refiled its complaint with slightly more detail. After litigating the case for more than a year and a half, the case was dismissed with prejudice and judgement was entered in favor of the defendants.
- Generic Solution Engineering, LLC v. Evans et. al., Case No. 2014-31540 (Volusia County): We represented the defendants in this matter. This case pitted a software development company against two former independent contractors and their new company. Generic accused the former contractors of starting their new company using stolen trade secrets. After the trial court entered an injunction, we appealed to Florida 5th DCA. The appellate court vacated the injunction. After more than a year and a half of litigation, we moved for and obtained partial summary judgment. The case then settled on confidential terms on the brink of trial.Lucky Cousins Trucking vs. QC Energy Resources, et al, Case No. 8:16-cv-00866 (MDFL 2016): We represented the plaintiff/counter-defendant Lucky Cousins. The case involved two companies in the energy hauling space. Lucky Cousins formerly was a sub-hauler for QC Energy Resources (“QCER”). The relationship went south. Lucky sued QCER for a variety of claims stemming from the parties failed business relationship including fraud, breach of contract, defamation and a claim for a declaratory judgment holding a non-compete agreement unenforceable. QCER countersued for breach of a non-compete agreement, breach of contract, tortious interference and theft of trade secrets. QCER moved to dismiss Lucky’s claims. The court denied that motion. QCER then moved for a preliminary injunction. The court denied that motion. QCER then moved for reconsideration on the denial of its request for an injunction. The court denied that motion. The case then settled on confidential terms.
- ASI Holding Company v. Abreu et al, Case No. 2013 CA 4103 (Okaloosa County) and 3:16-cv-00463 (Northern District of Florida): We took over representation of the defendants in this trade secret case more than two years after the original complaint was filed. The case involved a hotel amenities provider and a rival company founded by the plaintiff’s former employees. ASI accused the defendants of starting their new venture with stolen trade secrets. The corporate defendant declared Chapter 11 bankruptcy in federal court in South Carolina, where the corporate defendant is headquartered. After the bankruptcy filing, the case was removed to the NDFL under bankruptcy rules. The case eventually settled.
If you are faced with the prospect of initiating trade secret litigation or defending against claims of trade secret misappropriation anywhere in the state of Florida, contact our office. We have extensive experience litigating trade secret claims throughout the state and are licensed in all Florida state and federal courts, including the United States District Courts for the Southern, Middle and Northern Districts of Florida. To speak with an experienced Florida trade secret lawyer about your case, call our office.
Fort Lauderdale, Florida Trade Secrets Attorney 954-332-2380
When people think of intellectual property, they often think of patents. But trade secrets often represent a company’s most valuable assets. The Uniform Trade Secrets Act defines a trade secret as:
- Information, including a formula, pattern, compilation, program, device, method, technique, or process
- That derives independent economic value from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and
- Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Given this broad definition, almost every operational business possesses trade secrets that are vital to the success of the company. If a competitor or third party obtained and used those trade secrets, it could cause irreparable harm to the business.
Trade Secrets – Classic Examples
For instance, customer lists often feature prominently in trade secret litigation. Although the identity of an individual customer, standing alone, would not constitute a trade secret, a database containing customer names and variety of customer information certainly could. Beyond customer lists or databases, other frequently litigated trade secrets include things like business plans, market research, technological knowledge and formulas. A recent case involving the athletic apparel giant Nike provides a great example: There, there trade secrets at issue involved a variety of Nike’s business plans and market research: This included plans for new shoes, shoe designs and manufacturing data and market research and sales forecasts. This is a textbook example of trade secrets.
Trade Secrets – Defining Misappropriation
Theft of trade secrets is referred to as misappropriation. In many instances, misappropriation of trade secret cases arise out of an employment relationship. An individual works for a company and has access to certain trade secrets. That employee then leaves the company to work for a competitor. In some instances, the employee has actively misappropriated trade secrets and taken them with him. In the modern world, the misappropriation often occurs electronically, via the employee downloading corporate information to an external hard drive or emailing corporate materials to a personal email address.
But even where there is no evidence of active misappropriation, Plaintiffs can still pursue trade secret claims under the doctrine of inevitable disclosure. Once again, this often arises in the employment context: An individual works for a company and has access to trade secrets, then leaves to work for a competitor. Even if there is no evidence of actual misappropriation, plaintiffs can sometimes pursue trade secret claims by arguing that the individual would inevitably disclosure or use those trade secrets in his new position.
When one has acquired knowledge of a trade secret by reason of a confidential business relationship with the holder of the trade secret, he can be enjoined from improperly using or disclosing it, enjoined from working for a competitor or enjoined from doing business with certain customers. In many instances, particularly in Florida, trade secret claims are litigated in concert with claims for violations of a non-compete agreement or other restrictive covenant.
Florida, like many states, has adopted the Uniform Trade Secrets Act. The Florida Uniform Trade Secrets Act (“FUTSA”) prohibits the misappropriation of trade secrets and provides for both damages and injunctive relief. Fla. Stat. § 688.002 generally prohibits misappropriation, which it defines as (i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (ii) disclosure or use of a trade secret of another without express or implied consent by a person who (A) used improper means to acquire knowledge of the trade secret; or (B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was (I) derived from or through a person who has utilized improper means to acquire it; (II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or (C) before a material change of his position, knew or had reason to know that it was a trade secret ad that knowledge of it had been acquired by accident or mistake.
In May 2016, Congress enacted the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836, creating a federal remedy for theft of trade secrets. This is a critically important development in trade secret law because it ensures that a plaintiff always has the option of federal court for complex trade secret litigation.
Strategic Considerations in Trade Secret Litigation
Trade Secrets & Jurisdiction
Federal Court vs. State Court: If you have a legitimate trade secret case, or legitimate defenses, you never want to be in state court. To the extent possible, always litigate trade secret cases in federal court. On the plaintiff side, plaintiffs can file in federal court under the DTSA and bring pendant state law claims. On the defense side, defendants can remove trade secret cases to federal court on the basis of diversity. Unfortunately, DTSA claims can be filed in either state or federal court, which prevents removal on the basis of exclusive federal jurisdiction. If you are stuck defending a trade secret case in state court, you should consider all possible options. First, consider seeking to transfer the case to the district’s complex business court (if such a court exists). In Florida, for instance, these complex business courts exist in numerous jurisdictions (e.g. Broward County, Orange County, etc.). Second, if no such business court exists, and depending on the size of the case (e.g. the potential recovery/exposure), consider more aggressive removal strategies. For example: Many poorly plead trade secret claims involve allegations about copying documents/text/software. These allegations actually raise copyright issues. Federal copyright law completely preempts all state law remedies and creates a basis for removal (i.e. removal based on preemption). Third, if you’re stuck defending a complex trade secret case in state court, buckle down, defend yourself and consider a counter-attack. To the extent possible, launch your counter attack in federal court. The last thing a pure state court practitioner wants to deal with is, e.g., a federal Lanham Act case for false advertising.
The Doctrine: The inevitable disclosure doctrine essentially was created by the Seventh Circuit in PepsiCo v. Redmond, 54 F.3d 1262 (7th Cir. 1995). From the time Redmond was decided and for perhaps the next ten years, it was the heyday of inevitable disclosure. A number of courts throughout the country followed suit and adopted some form of the inevitable disclosure doctrine. In my view, the tide has turned. Washington recently rejected the inevitable disclosure doctrine in an important case involving Amazon and Google. And courts in other states like North Carolina and Georgia have issued decisions criticizing the doctrine and strongly limiting its applicability.
Current Status in Florida: Del Monte Fresh Produce Co. v. Dole Food Co., 148 F. Supp. 2d 1326, 1336 (S.D. Fla. 2001) remains the seminal case on inevitable disclosure. Per Del Monte, Florida courts have never adopted (nor embraced) inevitable disclosure in a pure trade secrets context.
Inevitable Disclosure & Non-Compete Agreements: When a non-compete agreement is present, courts routinely apply a variant of the inevitable disclosure doctrine. If an individual leaves one company under a non-compete agreement and begins working for a competitor, Florida courts routinely enjoin that individual if he had access to confidential information. Courts generally do not require any showing that disclosure of the confidential information/trade secrets would be inevitable. In effect, they presume inevitable disclosure without addressing the doctrine by name.
General Principle: A plaintiff must allege the plaintiff took reasonable steps to protect its trade secrets. See Fla. Stat. § 688.002. Recent decisions reaffirm the importance of taking (and pleading) reasonable steps to protect secrecy. Though not entirely dispositive, the absence of a written non-disclosure agreement is relevant to assessing whether a plaintiff took reasonably available steps to preserve secrecy.
Disclosure to Others: Trade secret protection is eviscerated when otherwise protected information is disclosed to individuals who have no obligation to protect its confidentiality.
Learn More About Jonathan Pollard- Florida Trade Secret Lawyer
To read about recent developments in non-compete litigation and trade secret litigation, visit Jonathan’s the non-compete blog, or check out these links:
Jonathan’s commentary in Digital Guardian about the threat of insiders and employees going rogue.
Coverage of a recent, major trade secret case filed by Pollard PLLC