Trade Secret Protection, Employee Defection, and Unfair Competition

Protecting Corporate Assets

In today’s marketplace, trade secrets and confidential business information play pivotal roles and constitute critical business assets. With rapidly evolving technology and IT functionality, intangible assets that provide competitive advantages are increasingly vulnerable to disclosure and theft.

Few events have the potential to inflict greater damage on a business than the misappropriation of trade secrets and confidential information, whether at the hands of a disloyal business partner, a would-be competitor, or a disgruntled employee. Time can truly be “of the essence” and there may be only one chance to prevent the loss or recover the valuable assets. On the other hand, a business’s reputation may be on the line as a result of accusations of misappropriation of trade secrets or other anti-competitive activity. Timely, effective, and strategically sound legal action is essential.

Blank Rome’s team of advisers and litigators know that the future of a client’s business may hang in the balance. Our team delivers a unique mix of legal skills, experience, and insight to help businesses either protect and defend their corporate rights to, and interests in, some of their most valuable and sustaining property—trade secrets and confidential information—or defend against allegations that a business has misappropriated someone else’s trade secret. With our experience, knowledge of the law, and practical business sense, we are adept at quickly developing a strategy to best protect our client’s interests and business objectives.

Our team of attorneys seamlessly bridges the gap between civil and criminal matters and has deep experience counseling business leaders, in-house counsel, and human resource managers. Our practice integrates the depth and experience of a large, geographically-diverse law firm with an unyielding, and we believe unique, commitment to personal client attention, service, and counseling. We are committed to our client’s needs and objectives and strive to help our clients meet and exceed their goals.

Our attorneys regularly assist clients in many industries by:

  • securing injunctions against competitors, former employees, and former business partners to halt unlawful conduct and/or to prevent irreparable business losses;
  • preventing or restricting employees from joining competitors or operating their own competitive ventures using valid and enforceable non-competition, non-solicitation, non-disclosure, and assignment agreements, as well as statutes and the common law;
  • protecting companies against claims that their own products or business methods have been developed or derived from unlawfully obtained information;
  • evaluating information assets for trade secret status and reviewing security to ensure adequate protection that can support claims to judicial relief;
  • advising on hiring to control for litigation risk;
  • formulating appropriate polices and employment contracts to ensure that employer rights are protected;
  • immunizing senior management from liability when lower level employees act improperly and without authority;
  • interacting with law enforcement on criminal prosecutions resulting from information and trade secret theft; and
  • recovering information, lost profits, damages, and counsel fees in litigation.

What We Do

Secure Client’s Business through Litigation

  • Secure judicial relief before competitors can cause harm in the market.
  • Rapidly respond when competitors take employees, customers, or data.
  • Protect our clients from claims of trade secret misappropriation and other anti-competitive claims.
  • Draw on extensive court experience in contract law and federal and state anti-unfair competition statutes.
  • Understand our clients’ businesses and how to protect their competitive advantages in court.
  • Secure significant recoveries for our clients for both their actual damages and counsel fees incurred in court proceedings.

Train to Avoid Harm – Getting Ahead of the Problem

  • Train our clients on how to spot potential threats prior to incurring a loss.
  • Self-analysis of contracts, assets, and systems to ensure compliance with the latest legal landscape.
  • Conduct internal audits to help our clients avoid having to go to court.
  • Review whether security plans are sufficient to support court enforcement.
  • Establish practices to evaluate potential hiring without the risk of litigation.
  • Identify and classify information that could be subject to trade secret protection, evaluate trade secret protection processes, and make recommendations to better secure trade secrets.

Protect: Internal Investigations

  • Conduct sensitive internal investigations on suspected thefts of trade secrets with a team that includes former federal and state prosecutors.
  • Work with the authorities, if necessary, when our client has been victimized by theft.
  • Mitigate the consequential impact of such thefts on the company’s business.

What Makes Our Practice Different

Our team of attorneys prides themselves on our understanding of each client’s business and objectives, which enables us to identify and implement proactive steps to help our clients protect their interests. When litigation is called for, we act quickly.

Representative Engagements 

  • Secured a temporary restraining order and preliminary injunction against the manager of a specialized product group for a medical device manufacturer preventing her from taking a position with a competitor despite claims that she would have a different function. Secured an appellate decision upholding the injunctions and non-compete agreement. Later obtained a summary judgment awarding legal fees and damages against the former manager, personally leading to a successful settlement that secured compliance as well as the client’s fees and costs.
  • Obtained an immediate injunction prohibiting a sales professional from working for a competitor in a former sales territory. Uncovered evidence that the defendant purposefully slowed contract negotiations with a major customer prior to his resignation. After the defendant violated the injunction, an extended non-compete order was secured.
  • Obtained a preliminary injunction to prevent a group of employees from working and soliciting customers in violation of their agreements, and subsequently obtained contempt sanctions for a breach of the injunction order.
  • Obtained a permanent injunction against a C-level employee who resigned to start a competitive venture after downloading a customer and contract database to a “ghost account” for later recall.
  • Represented a medical device manufacturer in an action against the director of product development who resigned and misled management regarding his future employment plans, and lured away engineers as well as a senior sales executive. Brought action after part of the scheme came to light, but uncovered the full extent of the scheme in discovery. Settled in the third week of the trial for over $13 million, including an agreement not to hire employees for a year.
  • Evaluated whether a corporate employer had taken reasonable and sufficient measures to protect its trade secrets in anticipation of the departure of key employees, and effectuated plans to protect its trade secrets, including a revision of the departing employees’ severance agreements to secure the employer’s proprietary information.
  • In connection with a media company’s strategy for protecting its trade secrets, evaluated choice-of-law and venue provisions in the company’s non-compete agreement, and advised on the potential outcomes of enforcement actions under various states’ laws and in different courts.
  • Represented a large insurance brokerage firm in a suit against a former executive who violated a non-disclosure agreement and a non-compete agreement by misappropriating trade secrets, soliciting the former employer’s customers and employees.
  • Pursued a major competitor for raiding sales and product development employees in the medical device field in a tortious interference with the employer's agreements; brought actions against the individual former employees as well as the competitor. On the eve of the trial, the new employer made a multimillion dollar payment and agreed to a series of restrictions on its hiring practices.