If you believe that a former employee may have taken your trade secrets on his way out the door and you are considering court action to rectify the situation, it is important to have compelling evidence of the misappropriation. But as we discuss in this post, even with compelling evidence of misappropriation, the plaintiff’s failure to have taken “reasonable efforts” to maintain the secrecy of trade secret information may defeat the misappropriation claim.
Let’s review the following set of facts as an example:
An employee has left your company to work for a direct competitor. At that direct competitor, he does the same job he did while working for you. At his new company, he is attempting to contact some of your customers. When he left your company, he did not return his company-issued laptop or iPad. A forensic examination of those devices reveals that after he received a letter from you demanding the return of them, he opened 20 files that you contend contain highly confidential and proprietary information. That same analysis demonstrates that he connected more than 20 flash drives to the laptop after his employment was terminated. Indeed, on the day he returned the computer to you he connected six flash drives to it. He also emailed to his new colleagues a high-level competitive analysis of your company.…
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The Federal Trade Commission’s Division of Advertising Practices has recently finalized its investigation into Cole Haan’s “Wandering Shoe” contest wherein contestants could enter the contest by creating Pinterest boards titled “Wandering Sole” and including five shoe images from Cole Haan’s Wander Sole Pinterest Board as well as five images of contestants’ “favorite places to wander.” Contestants also were instructed to use #WanderingSole in each pin description. The contestant with the most creative entry would, under the contest rules, be awarded a $1,000 shopping spree from Cole Haan.
In its investigation closing letter, the FTC stated that it believes “that participants’ pins featuring Cole Haan products were endorsements of the Cole Haan products, and the fact that the pins were incentivized by the opportunity to win a $1,000 spree would not reasonably be expected by consumers who saw the pins.” The FTC also stated that “Cole Haan did not instruct contestants to label their pins and Pinterest boards to make it clear that they had pinned Cole Haan products as part of a contest” and that the #WanderingSole hashtag did not adequately communicate “the financial incentive—a material connection—between contestants and Cole Haan.”…
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Okay, folks, we won’t beat around the bush. This is just plain creepy! On Monday, the FTC finalized its order against Aaron’s, one of the country’s largest rent-to-own (RTO) stores, charging that its franchisees were spying on its customers.1 By the way, by spying, we mean to include taking webcam pictures every two minutes that the rented computer was connected to the Internet until directed to stop.
Many of Aaron’s franchisees licensed and installed PC Rental Agent, a privacy-intrusion software, on computers rented to consumers. Unbeknownst to the renters, the software allowed the franchisees to collect private, confidential and personal information about them. Ostensibly, the information was to be used to gather data to assist franchisees in collecting on past-due accounts and recovering computers after default. Nonetheless, the software allowed much more. When in “Detective Mode,” the software logged keystrokes, captured screenshots and activated a computer’s webcam. The program also allowed franchisees to track the physical location of rented computers using WiFi hotspot information.
Quite obviously, the franchisees’ use of this software, without notice to computer users, compromised the renters’ personal, financial and medical information, not to mention the untoward “invasion into the peaceful enjoyment of their homes.” The consumers were also harmed, according to the FTC, by the surreptitious capture of the private details of their lives, including images of visitors, children, family interactions, partially undressed individuals and, as the FTC delicately put it, “people engaged in intimate conduct.” As Walter Dartland, a former deputy attorney general of …
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