Trade Secret Report

• Citation: Vol. 46 No. 2
• Publication year: 2021

Trade Secret Report

Conor Tucker

Irell & Manella LLP

TRADE SECRETS—EXTRATERRITORIALITY

Defendants in a lawsuit involving trade secrets related to medical businesses in Latin America moved to dismiss the complaint as untimely under relevant statutes of limitations and as improper extraterritorial application of U.S. trade secret law. The Southern District of New York denied the motions. Regarding the statute of limitations, the DTSA provides that the three-year statute of limitation is tolled until the misappropriation "is discovered or by exercise of reasonable diligence should have been discovered." The court held that although defendants raised reasonable arguments that plaintiff should have known of the alleged misappropriation a year before filing suit, where the complaint did not "clearly show[]" plaintiff's claim is out of time, dismissal under 12(b)(6) is improper.

Regarding extraterritoriality, Defendants argued that the extraterritoriality of the DTSA applied only to criminal "offenses." The S.D.N.Y. rejected that argument and joined a growing consensus of district courts that the DTSA applies extraterritorially to both criminal and civil trade secret misappropriation. Because plaintiff alleged an act in furtherance of the misappropriation that occurred in the United States by a US citizen or corporation, the Court denied Defendants' motion to dismiss based on extraterritoriality.

Medcenter Holdings et al. v. WebMD Health Corp et al. Case No. 1:20-cv-00053 (S.D.N.Y. Mar. 29, 2021).

TRADE SECRETS—GRANTING INJUNCTIVE RELIEF & PRESUMING IRREPARABLE HARM

The Northern District of California granted a preliminary injunction in favor of plaintiff alleging theft of trade secrets by prior employee who took a hard-drive worth of information...