Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. In a recent decision out of the Northern District of Illinois, the Court reiterated that a trade secret is not simply proprietary information that a company claims to own and which has value because it is not generally known, but that the company must take steps to protect and maintain the secrecy of that valuable, proprietary, not generally known information. In the typical departing employee to form a competing company scenario, information regarding sales data, pricing, costs, and distributors were allegedly taken from the plaintiff, and used to benefit the defendant. The plaintiff sued under the federal Defend Trade Secrets Act and Illinois state trade secret law. The plaintiff moved for a preliminary injunction, but the Court denied the relief. While the information in question would have been subject to protection as trade secrets, the plaintiff did nothing to protect and maintain the proprietary nature of the information. The Court noted a number of steps that can be taken to maintain the secrecy of proprietary information, and thus help in establishing enforceable trade secret rights, but noted that the Plaintiff did not take such steps. Therefore, the motion for preliminary injunction was denied, and any purported trade secret protection appears non-existent. The opinion is here. The take home lesson here is that if you think you have a trade secret, make sure you take reasonable steps to protect it as such.
2. Adidas recently succeeded in reversing the Copyright Office’s denial of copyright protection on a shoe design that the Copyright Office originally asserted did not contain any authorship to support a copyright. Adidas appealed that determination in the Copyright Office, and while it succeeded in persuading the Copyright Office that there was separable authorship under the Supreme Court’s 2017 opinion in Star Athletica, LLC v. Varsity Brands, the Copyright Office maintained its refusal to register because the separable authorship was not sufficiently original to warrant copyright protection. On its second request for reconsideration in the Copyright Office, Adidas argued that there was sufficient original, separable authorship to support a copyright, and the Copyright Office agreed, finding that the standard for originality under the Supreme Court’s 1991 Feist decision is low, and considering the shoe as a whole, not as individual elements. This is a potentially important decision by the Copyright Office in that useful articles that are not heavily ornamented are typically not registrable, including for items such as shoes. This opens the door to potentially protect shoe designs under Copyright law.
3. The District of Delaware, now the country’s busiest patent district, issued an order in a standard essential patent (SEP)/FRAND case awarding an ongoing royalty for not only products found to infringe the asserted patents, but products that were “not colorably different” from the accused, infringing products. The opinion is here. In parallel to injunctions that often bar ongoing use of products that are “not colorably different” than the products found to infringe, an ongoing royalty remedy serves a similar purpose on the damages side. While this opinion, on its face, may not be earth-shattering, to the extent its reasoning is applied outside the SEP/FRAND context, it could make for potentially larger damages awards, and afford Plaintiffs greater leverage in situations where there may be a number of similar products identified in litigation, accused or not, that may infringe, and that could be the subject of a damages award.
