Wednesday, June 24, 2015

Does a former employee have to "forget" past information to avoid trade secret litigation?

See Ron Sokol's post Can trade secret laws be used to intimidate? including

You are not required to “forget” what you learned. Go over your nondisclosure agreement. Chances are it prohibits certain use and disclosure by you of an actual trade secret.

Sokol alludes to a certain trade secret case, which was Cypress v. Maxim, discussed on another blog in the following way:

Cypress Semiconductor Corp. v. Maxim Integrated Products, Inc., H038555 (Apr. 28, 2015). Cypress sued Maxim for trade secret misappropriation, alleging Maxim was attempting to hire its employees in violation of California law. Cypress pled two theories: (1) the names of its employees were trade secrets and Maxim wrongly obtained and exploited a list of its employees, and (2) Cypress was seeking to hire its employees to misappropriate their knowledge of Cypress’ touchscreen technology. The trial court denied Cypress’ requests for preliminary relief, finding Cypress had no evidence to support its claims. One piece of telling evidence the court noted was a declaration submitted by Maxim’s attorney demonstrating she learned the name of nearly every Cypress employee who worked on touchscreen technology by spending an afternoon perusing LinkedIn. Facing an upcoming hearing on Maxim’s demurrer to its first amended complaint, Cypress voluntarily dismissed its lawsuit without prejudice. Maxim thereafter sought and was awarded $180,817.50 in sanctions on the ground Cypress had brought its suit in bad faith, which under California law has two prongs: (1) objective speciousness of the claim, and (2) subjective bad faith in bringing or maintaining the action, i.e., for an improper purpose.



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