Technology, Media & Intellectual Property Law Alerts

By Ted Kobus, Esq. (215-575-2713 or tjkobus@mdwcg.com)

Court Held That, At A Minimum, A Plaintiff Should Identify The Trade Secrets At Issue With "Reasonable Particularity."
Gentex Corp. v. Sutter, Civil Action No. 3:07-CV-1269, 2008 U.S. Dist. LEXIS 96188 (M.D. Pa. Nov. 25, 2008)

Many insurance policies do not cover trade secret misappropriation; however, these claims are oftentimes included interwoven with claims for copyright infringement or breach of contract. In this case the court addressed the issue of what level of specificity a plaintiff should be required to show before obtaining discovery of a defendant's trade secrets. The plaintiff alleged it was unable to know the extent that its trade secrets had been misappropriated and utilized until it obtained discovery, which included the defendants' trade secrets. The defendants were obviously concerned they would be forced to turn over their trade secrets in discovery which were not misappropriated by former employees of the plaintiff and would be giving their competitor trade secrets that it did not currently possess.

The court, citing Sit-Up, Ltd. v. IAC/InteractiveCorp., No. 05-cv-9292, 2008 U.S. Dist. LEXIS 12017, 2008 WL 463884, at *11 (S.D.N.Y. Feb. 20, 2008), noted that some District Courts require the plaintiff to describe an alleged trade secret with specificity in order to put the defendant on notice of what it has misappropriated. The court also recognized that other courts determine the level of specificity that a plaintiff is required to describe its alleged trade secrets on a case-by-case basis, and cited DeRubeis v. Witten Techs., Inc., 244 F.R.D. 676, 681 (N.D. Ga. 2007). The court held that, at a minimum, a plaintiff should identify the trade secrets at issue with "reasonable particularity," and explained the plaintiff was required to provide the defendant with a sufficient description to put the latter on notice of the nature of the plaintiff's claims so that the defendant can discern the relevancy of any requested discovery.

Recent data retention legislation, introduced in both the Senate and House, would require internet providers to retain for two years records pertaining to users on their networks who are assigned temporary Internet Protocol (IP) addresses. The Bill is called the "Internet Safety Act," and its purported purpose is to assist police investigations and protect children online. However, its broad-based language would likely apply not only to Internet Service Providers (ISPs), like Verizon and Comcast, but also to anyone who operates a Wi-Fi (wireless) access point, corporations, small businesses, and individuals. Also, the proposed data retention law would assist not only police, but it likely would help corporations and copyright holders in bringing civil lawsuits where they need to link an IP address to an individual.

In the latest of enforcement actions brought by the FTC against companies for failing to honor representations made in their website privacy notices, Geeks.com has settled a complaint filed by the FTC related to a data breach that happened in December 2007 and was disclosed in January 2008. As part of the settlement, Geeks.com will submit to five outside privacy audits over the next ten years. Comparably, TJX agreed to ten outside security audits over a 20-year period in its settlement with the FTC. The Geeks.com breach was notable because the site displayed a MacAfee, Inc. "Hacker safe" seal (since renamed "McAfee Secure") even though the seal had been withdrawn on multiple occasions during 2007 after scans found vulnerabilities. According to a complaint filed by the FTC, Geeks.com routinely stored sensitive customer data in unencrypted form on its systems prior to discovering the breach. The retailer also was alleged to have inadequately assessed whether its Web applications and network were vulnerable to commonly known and foreseeable hacking attempts, including SQL injection attacks.