Source: http://tsi.brooklaw.edu/cases/location/9th-circuit
Timestamp: 2019-04-18 21:25:56+00:00

Document:
U.S. v. Christina Liew et al.
On September 29th, 2015, Judge White of a California federal district court accepted Christina Liew’s plea agreement, sentencing her to three years of probation and restitution to the IRS in the amount of $6 million. As part of the plea agreement, Ms. Liew pled guilty to conspiracy to tampering with evidence. Her Husband, Walter Liew, was the first person to be convicted of economic espionage by a U.S. jury in March 2014 and was sentenced to 15 years in prison.
Walter Liew was found guilty of economic espionage and trade secret theft after selling DuPont's coveted titanium dioxide (TiO2) recipe to Chinese state-owned entities. The highly guarded DuPont recipe was used for both the Oreo cream recipe, as well as the manufacturing of paper and plastics.
U.S. Legal Support, Inc., a provider of court reporting services, sued two of its former employees and their new employer for misappropriating its customer lists in order to set up a competing business in the area of Northern California.
In a decision that may be reviewed by the circuit court, the E.D. Cal found that defendants' motion to dismiss some claims based on the pre-emption of common law trade secrets claims by California's Uniform Trade Secrets Act (CUTSA) was premature. The court said that the question turned in part on whether plaintiffs had succeeded in showing that defendants had violated a common law property right that was based "on grounds that are qualitatively different from the grounds upon which trade secrets are considered property" (citing Bryant v. Mattel, Inc., No. CV 04–9049 DOC (RNBx), 2010 WL 3705668 at *22 (C.D. Cal. Aug. 2, 2010)). Because this was a question of fact rather than law, "[d]efendants can determine in discovery whether Plaintiff’s contentions have any merit, and when appropriate, bring a summary judgment motion as to the issue of supersession."
CBS requested a preliminary injunction in order to stop ABC from premiering the show, however U.S. District Judge Gary Allen Feess said he is unlikely to grant it.
In a 2011 opinion, the Court of Appeals for the Ninth Circuit affirmed the first trial court conviction under the Economic Espionage Act. Notably, the appellate court in United States v. Dongfan Chung addressed the independent economic value requirement under 18 U.S.C §1839(3)(B) as either actual or potential. In line with the statutory language, the Court asserted that the owner of secret information need not have actual competitors in order to rightfully protect its economic value.
In US v. Chung, the defendant Dongfan “Greg” Chung, a former engineer for the US-contractor Boeing, was found in possession of over 300,000 Boeing documents, including six documents containing Boeing trade secrets. On appeal of his conviction, Chun argued insufficient evidence as to the existence of any Boeing trade secrets within the documents he possessed. The court looked specifically at four Boeing documents relating to a NASA space-shuttle antenna. Judge Graber found that Boeing maintained the secrecy of the particular Boeing information and enacted reasonable protective measures to maintain secrecy. Most notably, the Court endeavored in an extensive analysis of he economic value required for such information to be trade secrets. While the EEA’s definition of trade secret is grounded upon the standard outlined in the Uniform Trade Secrets Act (UTSA), the text of §1839(3)(B) further defines the economic value of trade secret information as either actual or potential, and does not mention the existence of competitors.
The court reasons that such information “could assist a competitor in understanding how Boeing approaches problem-solving and in figuring out how best to bid on a similar project in the future, for example, by underbidding Boeing on tasks at which Boeing appears least efficient.” Thus the Court held Boeing’s secret information independently valuable not for Boeing’s potential use, but for use of such information by any potential Boeing competitor. Thus the Ninth Circuit held that under the EEA, companies need not have actual competitors in order to derive economic value from maintaining the secrecy of certain information.
Plaintiff Elinor Shapiro (“Shapiro”) alleges that Defendant Hasbro, Inc. (“Hasbro”) misappropriated her trade secrets regarding new versions of the popular doll “My Little Pony.” Shapiro works as a doll creator and made a submission to Hasbro for a new line of pony dolls that are clear, filled with glitter, and light up. The submission included a presentation, marketing plan, and prototypes. Roughly 17 months later, Hasbro released a new line of “My Little Pony” dolls that are clear, light up and filled with different colored glitters. Shapiro argues that this was a misappropriation of information she presented, and has filed two lawsuits against Hasbro.
Shapiro’s first lawsuit, Shapiro v. Hasbro Inc. et al.,, No. 2:15-cv-02964, which is set to go to trial in September 2016, alleges multiple claims including copyright infringement, breach of contract, and multiple California trade secret law violations. Shapiro filed the second lawsuit, Shapiro v. Hasbro Inc. et al., No. 2:16-cv-05750, on August 2, 2016. The second suit drops the copyright infringement claims and focuses more on trade secrets, including a claim under the Defend Trade Secrets Act (DTSA), which took effect in May 2016.

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