CK&E regularly works with clients to identify and protect their intellectual property both in the United States and abroad, and participates in industry conferences like INTA’s Annual Meeting and others to stay abreast of the developing issues affecting the firm’s clients.
The DTSA will provide businesses with more effective new tools to protect their sensitive information from misappropriation. In the context of trade secrets, misappropriation is generally considered the acquisition of hidden information through some improper means . The broadly structured language of the DTSA extends its protection to “all forms and types of financial, business, scientific, technical, economic, or engineering information” so long as (1) the owner has taken reasonable steps to keep the information secret and (2) the information derives its value from that secrecy. The DTSA largely tracks the concepts of trade secrets that have long existed in most states. But under the DTSA, plaintiffs will be able to bring claims for misappropriation of trade secrets in federal court.
Previously, trade secrets have been an outlier in the world of intellectual property. Unlike copyright, patent and trademark claims, which receive the wider benefit and protection of federal court jurisdiction, trade secret claims have mostly been litigated in state court. The problem with this has been that, given the diffuse and global nature of business and commerce, state courts are often not the best venue for intellectual property claims. If a misappropriation occurs across state or national borders, a federal court is better suited to address such jurisdictional conflicts.
To gain access to the DTSA, and federal court jurisdiction, all that is required is that the “trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” This is generally a very low threshold, as most products and services these days are used or intended for use in at least interstate commerce – only the most localized of businesses would not be able to meet this minimal requirement.
The DTSA will confer on trade secret holders a greater ability to pursue misappropriation beyond the borders of the United States, and can even pursue remedies before the International Trade Commission. In addition, a secondary benefit gained from access to the federal court system is a potential for more uniform decisions and precedent than the more disparate and varied state courts decisions.
Another interesting development that the DTSA will usher in relates to injunction and damages. Injunctions are often sought in trade secret cases to prevent the information at issue from being disclosed. Previously, under the Uniform Trade Secrets Act (UTSA), which almost all states have adopted in some form or another, the injunction would end when the trade secret ceased to exist or after an amount of time necessary to stop any potential commercial advantage being gained from a misappropriation. The DTSA however contains no such limitation, which presumably will give courts more discretion in applying an extended injunction. Also, where the UTSA allows for double damages in cases of “willful and malicious misappropriation”, the language of the DTSA has upped this to treble damages.
Perhaps the biggest tool in the DTSA tool belt is the ability to seek ex parte civil seizures. What this means is that a plaintiff can, without giving a defendant notice, seek the seizure of property if the plaintiff can demonstrate that the defendant, or someone working in concert with the defendant, is likely to “destroy, move, hide, or otherwise make such matter inaccessible to the court”. This type of ex parte seizure is a powerful new tool that will likely allow trade secret holders to better combat harm associated with a misappropriation. And being a powerful tool, it may be subject to misuse among competitors.
Conkle, Kremer & Engel attorneys stay current on developments that may be important to their clients concerned about commercial and intellectual property issues. If you have questions about the DTSA or other aspects of trade secret or intellectual property protection, we would be glad to hear from you.
The theme of this ERA SoCal roundtable forum was “Strengthening Your Hand,” and featured Eric’s presentation on ways that business owners can improve their contracts, business relations and collection rates. The focus was on avoiding disputes that can lead to litigation, and being prepared to present a strong hand if a dispute does arise.
The open forum included many thoughtful questions and comments by business owners, who shared their industry experiences and challenges they have faced. In addition to outlining important terms that should be included in written contracts, discussion also concerned the application of the Independent Wholesale Sales Representatives Contractual Relations Act, California Civil Code §§ 1738.10 et seq., a “pro-representative” law in California that requires manufacturers to have a signed written contract with sales reps, and provide written accountings with every payment of commissions. When a manufacturer willfully fails to comply with requirements of the Act, the sales rep agency is entitled to “treble damages” – three times the unpaid commissions – plus attorney fees.
Eric has handled commission matters for many years, and was lead trial attorney in Reilly v. Inquest Technology. The Reilly case was the first precedent in California that enforced the full remedy of treble damages under the Act, resulting in $2.1 million jury verdict becoming a judgment for $6.2 million, plus attorney fees and interest. ERA and its partner organization, Manufacturers’ Agents National Association (MANA), were important sponsors of the Act and similar legislation enacted in about 36 other states to protect the rights of independent wholesale sales representatives. CK&E is proud to be able to help sales representatives create contracts that protect their rights to be paid for their services, and to help them enforce their rights when disputes arise.
The FEHA regulatory amendments require all affected employers to have written policies prohibiting workplace discrimination and harassment. The policies must apply to prohibit discrimination and harassment by co-workers, who are made individually liable for their own violations, and by third parties such as vendors in the workplace. The regulations demand that the written policy list all currently-protected categories protected under FEHA: Race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and military or veteran status. Prohibited “sex discrimination” includes discrimination based on pregnancy, childbirth, breastfeeding and related medical conditions. Interestingly, the regulations also prohibit discrimination against employment applicants holding a special California driver’s license issued to persons without proof of legal presence in the United States. It is not yet clear how this will work in conjunction with the employer’s existing Federal obligation to confirm eligibility for employment.
The employer’s written policy must specify a confidential complaint process that satisfies a number of criteria. Workplace retaliation for making good faith complaints of perceived discrimination or harassment is prohibited. The written policy must be publicized to all employees, with tracking of its receipt by employees. If 10% of the employer’s work force speaks a language other than English, the written policy must be translated to that language.
Further, the new regulations attempt to resolve a number of uncertainties about who is protected, specifying that both males and females are protected from gender discrimination, and requiring that transgender persons be treated and provided facilities consistent with their gender identity. There are many other changes, such as a new entitlement to four months for pregnancy leave that is not required to be taken continuously. If an employer has more than 50 employees, there are additional requirements, such as periodic sexual harassment prevention training for supervisors.
Employers operating in California are well advised to review their policies and practices, and to consult with qualified counsel regarding changes that may be required. Conkle, Kremer & Engel attorneys help clients remain compliant with laws, regulations and case developments affecting employers in California.
The California State Bar has the staid mission of regulating the admission of attorneys and investigating assertions of attorney misconduct. Yet in November 2015, the State Bar found itself charged with wrongful employment retaliation after it fired one of its top managers, John Noonen. Noonen asserted that the termination was retaliatory because, just a few weeks earlier, he submitted a 40-page internal complaint against the State Bar’s top attorney for allegedly failing to properly investigate complaints against the president of the State Bar. The State Bar has denied Noonen’s retaliation allegations and has said that Noonen’s position was eliminated as part of a cost-saving effort.
Less than two months later, the same types of claims led to a sizeable jury verdict against a completely different business run by famed yoga guru Bikram Choudhury. Choudhury made his fortune teaching yoga instructors his techniques and allowing graduates to operate yoga studios that feature a specific yoga sequence performed in a 104-degree room. In January 2016, a Los Angeles jury found that Choudhury sexually harassed his former legal advisor and wrongfully fired her for investigating others’ claims of sexual discrimination and assault against him. Choudhury asserted he had good cause to fire his legal advisor because she was not licensed to practice law in California. The jury first ordered Choudhury and his yoga business to pay $924,000 in compensatory damages, and the next day the jury upped the ante with a further award of $6.4 million in punitive damages.
In each of these recent cases, employees alleged that their bosses improperly “retaliated” against them for investigating workplace misconduct. Most employers and employees know that laws exist to protect employees from wrongful discrimination and harassment. The same laws also provide that employers cannot punish or “retaliate” against employees for making complaints about other potentially wrongful employment conduct, such as discrimination or harassment, or for participating in workplace investigations about such potential wrongful employment conduct.
“Retaliation” is prohibited by the same federal laws that prohibit employment discrimination based on race, color, sex, religion, national origin, age, disability and gender. “Retaliation” can take many forms, including termination, demotion, suspension or other employment discipline against the employee for engaging in protected activity, such as reporting perceived employer discrimination or other misconduct. Owing to its broad scope, retaliation is a claim commonly raised by disgruntled or terminated employees. In fact, according to the federal Equal Employment Opportunity Commission (“EEOC”), retaliation is the most common basis of discrimination claims in EEOC cases.
These cases illustrate some of the many circumstances in which employment issues can lead to litigation against a wide variety of employers. Conkle, Kremer & Engel regularly advises employer and individuals on workplace issues and the ramifications of retaliation and harassment claims so that all involved can take steps to resolve conflicts in a meaningful, efficient way. When circumstances do not do not allow a non-litigated solution, CK&E attorneys litigate and arbitrate employment disputes including retaliation claims, whether the claims are asserted individually or as a class action.
The article was written by Conkle, Kremer & Engel attorney Eric S. Engel and CK&E’s summer law clerk Ryan Fisher, a student at University of California, Irvine Law School. CK&E is proud to be a member of ERASoCal, which is a trade association of independent manufacturers sales representative firms in Southern California’s vibrant electronics industry. Eric has significant experience in sales commission claims, and he was lead trial counsel in the case that resulted in the first published decision in California applying the special protections of Civil Code Section 1738.10 et seq., including treble damages and attorney fees for unpaid sales commissions: Reilly v Inquest Court of Appeal Decision, Case No. G046291 (July 31, 2013)
For other businesses, the deadline to report 2013 data has passed. Unless they have been granted an extension from CARB, formulators were required to comply by April 1, 2015 and all other businesses, by March 1, 2015.
The 2013 Consumer and Commercial Products Survey is part of a comprehensive three-year data collection effort by CARB, which is authorized by law to collect data about chemically formulated products. The Survey collects formulation data and sales information for chemically formulated consumer and commercial products sold or supplied for use in California during the 2013 calendar year. Compliance with the Survey is mandatory.
The Survey is remarkable in its breadth, targeting virtually all consumer and commercial products. The Survey requires that each “responsible party” listed on the label of a consumer or commercial product that was sold or supplied for use in California during the calendar year, and falls into a category listed on that year’s Survey Category List, is required to report detailed product ingredient information, as well as annual sales on a per-product basis, to CARB through the online Consumer Products Reporting Tool.
The general categories of consumer products that are subject to reporting in 2013 are personal care products, adhesives, sealants and related products, household and institutional products, pesticide products, solvent and thinning-related products, vehicle and marine vessel aftermarket products, and aerosol coating products.
In addition, updated data for the 2014 and 2015 calendar years must also be reported to CARB. Businesses who are required to report should plan for timely compliance with the 2014 Survey, which opens on July 1, 2015. The deadline for reporting 2014 Survey data – including 2014 sales – is November 1, 2015. In addition, CARB expects to begin collecting 2015 data on July 1, 2016 with all 2015 data due by November 1, 2016.
Conkle, Kremer & Engel provides expert guidance to clients as they navigate compliance with California’s complex and ever-changing regulatory requirements, including the Consumer and Commercial Products Survey.
Additional Extension Requests
The California Air Resources Board (ARB) recognized the substantial resources required to complete the 2013 Consumer and Commercial Products Survey (2013 Survey). In some cases, ARB announced, companies may need extra time to complete reporting of 2013 data beyond the 90 statutorily required days and the additional 90-days ARB staff already issued due to the 2013 Survey scope. Below is a summary of the additional extension request process announced by ARB.
1. Formulators: All formulators will receive a 30-day extension to submit formulation data to ARB. The due date for formulators is extended to April 1, 2015. Formulators automatically receive the extension and do not need to send an email to request one.
2. Small Businesses: Responsible parties who are also a small business have an additional extension until July 1, 2015 for reporting 2013 data. For purposes of the 2013 Survey, a small business is defined as a company or entity with 25 or less full-time, part-time and contract employees combined. The 25 employee count must also include seasonal workers. For example, a salon with their own product line of hair care products with a 12 part-time employees would quality for this extension. Small businesses automatically receive the extension and do not need to send an email to request one.
3. Responsible Parties (other than those who qualify as “Small Businesses”): Responsible party requests will be handled on a case-by-case basis, and must request an extension by email no later than February 27, 2015. To request an extension from the original survey due date of March 2, 2015, responsible parties must email firstname.lastname@example.org by February 27, 2015 to make a request, and the email must have the following title: “2013 Survey Additional Extension Request – Company Name (add your company name here)”. In order to receive an extension, responsible parties will need to provide the following information:
a) When did you learn about the 2013 Survey?
b) When did you start working on the 2013 Survey?
c) When did you finish your data collection effort for the 2013 Survey?
d) Approximately how many products will you report? labels?
e) How far along are you in entering data into the Consumer Products Reporting Tool (CPRT)?
f) How much time are you requesting to complete the 2013 Survey?
ARB staff will notify each company the results of their request via email.
ARB also reminded survey participants to submit complete data reports, as partial data sets will not be accepted.
Conkle, Kremer & Engel attorneys keep abreast of the latest developments in California regulatory laws to guide the firm’s clients through the shifting labyrinth that they must navigate.
This problem has become so widespread and severe that the World Intellectual Property Organization (WIPO) published a list of known international trademark registration scams. The USPTO keeps a similar scammer database, identifying the following organizations that sent non-USPTO solicitations, prompting consumer complaints to the USPTO:
In October 2014, a New York firm successfully won a lawsuit against “Patent & Trademark Agency LLC” for unfair competition and deceptive marketing practices, putting the company out of business. A Final Consent Judgment was entered against Patent & Trademark Agency LLC, by which it agreed to permanently discontinue marketing and selling trademark registration or renewal services in the United States.
If you receive any unexpected email or correspondence regarding a trademark registration, you should immediately contact the USPTO or your counsel to verify the veracity of the sender and the correspondence. Conkle, Kremer & Engel assists individuals and companies in all aspects of intellectual property protection, including the filing and maintenance of trademark registrations – and we know how to discriminate legitimate vendors from scammers.