Justia Intellectual Property Opinion Summaries

A group of affiliated pest-control companies discovered that employees of a competing firm, Aptive Environmental, LLC, had bribed members of their organization to obtain confidential sales data stored in a password-protected system. The misappropriated data was allegedly used by Aptive to recruit sales representatives for the competitive summer sales season, an activity crucial to both businesses’ revenue. Upon learning of these actions, the companies sued Aptive and several individual employees, asserting claims under the Computer Fraud and Abuse Act (CFAA), the Racketeer Influenced and Corrupt Organizations Act (RICO), the Defend Trade Secrets Act (DTSA), and Utah’s Uniform Trade Secrets Act (UTSA).The United States District Court for the District of Utah initially dismissed the CFAA claim, concluding that the plaintiffs had not sufficiently pleaded the statutory loss requirement, specifically a loss from technological harm. The court denied motions to compel broad discovery into damages, limiting disclosures but allowing the possibility of further tailored discovery. On summary judgment, the district court found that the plaintiffs failed to provide sufficient evidence of causation linking Aptive’s alleged misappropriation to unjust enrichment, granting judgment for Aptive on the RICO, DTSA, and UTSA claims.The United States Court of Appeals for the Tenth Circuit reviewed these decisions. It held that the district court erred in dismissing the CFAA claim, clarifying that the statute does not require loss from technological harm and that investigative costs can qualify as statutory losses. The appellate court affirmed the district court’s denial of broad discovery, finding no abuse of discretion. Regarding summary judgment, the Tenth Circuit affirmed the outcome for the RICO claim due to lack of causation evidence but reversed in part for the DTSA and UTSA claims, holding that reasonable royalties and injunctive relief do not require the same proof of causation as unjust enrichment. The CFAA, DTSA, and UTSA claims were remanded for further proceedings. View "Moxie Pest Control (Utah) v. Nielsen" on Justia Law

Kesters Merchandising Display International, Inc. and SurfaceQuest, Inc. are competing manufacturers in the architectural materials industry. Kesters produces MicroLite, a lightweight, seamless material. Around 2014, the parties collaborated to market samples of MicroLite wrapped in SurfaceQuest film, with Kesters supplying photographs and product guides. Subsequently, SurfaceQuest began independently selling and marketing its own lightweight beam wrapped in its film, utilizing photographs of MicroLite in promotional materials. Kesters alleged that SurfaceQuest misrepresented MicroLite as its own in various advertisements and communications with customers.The United States District Court for the District of Kansas presided over the initial lawsuit. Kesters claimed false advertising under the Lanham Act, arguing that SurfaceQuest’s use of MicroLite images and representations damaged its business. Both parties moved for summary judgment on the Lanham Act claim. The district court granted summary judgment to SurfaceQuest, finding that Kesters had neither established a presumption of injury nor presented evidence of actual injury resulting from the alleged false advertising.On appeal, the United States Court of Appeals for the Tenth Circuit reviewed the case de novo under the summary judgment standard. The appellate court determined that injury could not be presumed because Kesters failed to show that only two significant competitors existed in the relevant market or to provide evidence of cross-elasticity of demand. Furthermore, Kesters did not present evidence of actual injury, such as a causal connection between SurfaceQuest’s advertising and lost business opportunities. As a result, the Tenth Circuit affirmed the district court’s grant of summary judgment to SurfaceQuest and the denial of Kesters’ motion for summary judgment, holding that Kesters did not provide evidence supporting the required element of injury for its Lanham Act claim. View "Kesters Merchandising Display International v. SurfaceQuest" on Justia Law

John Snyder, after working for Guardian Life Insurance Company and obtaining a national customer list (the Guardian Broker List), was employed by Beam Technologies, Inc. Snyder claims that Beam induced him to join and disclose the list, promising compensation. While at Beam, Snyder created state-specific broker lists derived from the Guardian Broker List and inadvertently included the full list in emails to several Beam employees. He did not mark the lists as confidential, restrict access, or inform Beam of their confidential nature. After his employment ended, Snyder did not attempt to recover the list or notify Beam of its confidential status, and he later confirmed to Beam’s CEO that the disclosure was intentional.Snyder sued Beam in the United States District Court for the District of Colorado, alleging misappropriation of trade secrets under federal and state law, as well as several state law claims. The district court granted summary judgment to Beam on the trade secret claims, finding Snyder failed to show he “owned” the Guardian Broker List. The court also granted Beam’s motion to exclude Snyder’s damages expert under Federal Rule of Evidence 702 and, in doing so, barred Snyder from presenting any evidence or witnesses on lost wages for his remaining claims. Snyder’s motion to reconsider this order was denied, and the parties settled or dismissed the remaining claims, leading to a final judgment.The United States Court of Appeals for the Tenth Circuit affirmed summary judgment on the trade secret claims, holding that Snyder failed to take reasonable measures to maintain the secrecy of the Guardian Broker List, a requirement under both the Defend Trade Secrets Act and the Colorado Uniform Trade Secrets Act. However, the Tenth Circuit reversed the district court’s Rule 702 order to the extent it excluded all evidence and witnesses on lost wages, finding that such a dispositive ruling required notice and the procedural protections of summary judgment. The case was remanded for further proceedings on that issue. View "Snyder v. Beam Technologies" on Justia Law

Michael Hooper, a former employee of Double Eagle Alloys, Inc., left the company to join competitor Ace Alloys, LLC, taking with him 2,660 digital files containing Double Eagle’s business information. Double Eagle discovered the download and sued Hooper and Ace Alloys, alleging trade-secret violations, misappropriation of confidential business information, and civil conspiracy.The United States District Court for the Northern District of Oklahoma granted summary judgment to Hooper and Ace Alloys on all claims. The court found that Double Eagle failed to identify its alleged trade secrets with sufficient particularity and clarity to proceed to trial. The court also held that Double Eagle did not present evidence that its business information was confidential, and thus, the misappropriation claim could not stand. Finally, the court dismissed the civil-conspiracy claim because it lacked an underlying tort.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court affirmed the district court’s decision, agreeing that Double Eagle did not identify its trade secrets with sufficient particularity. The court noted that Double Eagle’s PSQ specifications, pricing, and customer drawings were either publicly available or not shown to be unique and confidential. The court also found that Double Eagle failed to present sufficient evidence that its business information was confidential, as required for the misappropriation claim. Consequently, the civil-conspiracy claim was also dismissed due to the absence of an underlying tort. View "Double Eagle Alloys v. Hooper" on Justia Law

Defendant Donald Bowers was previously involved in a civil trade secret misappropriation case that was litigated in the United States Federal District Court. During the course of that litigation, Bowers willfully and repeatedly violated a permanent injunction, and refused to purge himself of civil contempt. His actions resulted in findings of civil contempt against him, judgments against him for the plaintiff’s attorneys’ fees, and, ultimately, a criminal referral to the United States Attorney for the District of Utah. A federal grand jury subsequently indicted Bowers on two counts of contempt. The case proceeded to trial, where a jury found Bowers guilty of both counts. Bowers was sentenced to a term of imprisonment of fifteen months, to be followed by a thirty-six month term of supervised release. He was also directed, as a condition of supervised release, to make monthly payments on the outstanding amount owed by him to the plaintiff in the underlying civil case. Bowers appealed, arguing that the district court erred in: (1) imposing a special condition of supervised release requiring him to make monthly payments on the outstanding judgments owed to the plaintiff in the civil case; (2) denying his motion for disclosure of the criminal referral; and (3) sentencing him to a term of imprisonment that exceeded six months. Finding no reversible error, the Tenth Circuit affirmed. View "United States v. Bowers" on Justia Law