Articles Posted in Trade Secrets

Congress enacted the Defend Trade Secrets Act (DTSA) to supplement the state law trade secret protection available to aggrieved businesses.  While the Florida Uniform Trade Secrets Act (FUTSA) and DTSA cover essentially identical conduct, the DTSA provides unique opportunities for plaintiffs to pursue their case in a federal forum and allows plaintiffs to seek an order of seizure.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Trade secret law is generally uniform between the states.  Florida codified trade secret law when it enacted the Uniform Trade Secrets Act in 1988.  FUTSA is substantially the same as Uniform Trade Secret Act (UTSA), which was enacted in 47 other states.  FUTSA specifically recognizes that it should be interpreted in conformity with the other states’ versions of the UTSA.   § 688.009, Florida Statutes (“Sections 688.001-688.009 shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it”).

The DTSA, 18 U.S.C. 1831, et seq., was enacted on May 11, 2016 to supplement the trade secret rights already provided under state law.  DTSA makes unlawful the same conduct which is already unlawful under UTSA/FUTSA.  18 U.S.C. § 1839(3) (defining “trade secret” as information which “the owner thereof has taken reasonable measures to keep such information secret; and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information”); § 688.002 (4), Florida Statutes (defining “trade secret” as information which [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy”).

Companies in business litigation often want to sue persons who make slanderous statements or outright lies about them during legal proceedings. Under Florida’s absolute litigation privilege, a defendant may slander and lie and still be absolutely immune from a later lawsuit for defamation, tortious interference with a business relationship, and some other causes of action, so long as the slander and lies were made in the courtroom or during the formal discovery process and had some relation to the litigation.  Some litigants have tested the limits of what could be considered an act done in the course of or in relation to litigation to avoid liability for such statements. Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

An example of this occurred in the case of Arko Plumbing Corp. v. Rudd, 230 So. 3d 520 (Fla. 3d DCA 2017), Arko Plumbing Corporation (Arko) identified cracks in pipes, assisted homeowners in filing claims under their insurance policies, and replaced the damaged cast-iron pipes. Arko used a MotoMon Global Positioning System, an internet-based computer program, that recorded historical and real-time access to the location of Arko’s service vans. John Collucci (Collucci), a former Arko employee possessed a, still-active password to the MotoMon program. Michael Rudd (Rudd) and his law firm, Rudd & Diamond, P.A., represented insurance companies on claims that they breached homeowner’s insurance policies by not covering Arko’s repairs to the homeowners’ damaged pipes. Colluci assisted Rudd and his firm by providing access to the historical location information for eighteen Arko clients. Rudd and his firm issued subpoenas to Arko for its MotoMon information, including information related to location of Arko service vans at specific residences. Rudd and his firm conducted examinations under oath required by the insurance policy and asked questions based information they obtained through the Motomon system concerning Arko’s historical location information of its service vans.

Arko filed a lawsuit against Rudd and his firm, and various other defendants, including Collucci. Arko’s claims against Rudd and his firm were based on: (a) their unauthorized access to the MotoMon account, and (b) the questions asked during the examination under oath, which were based on information from the MotoMon system. Rudd and his firm moved for summary judgment based on, among other things, the litigation immunity privilege and because the information on the MotoMon program was not a trade secret under Florida law. The trial court granted the motion for summary judgment. Arko moved for rehearing, but it was denied. Arko immediately appealed.

Business litigation between competitors often involves discovery of information that may be subject to trade secret protection. Parties will often enter stipulations for confidentiality orders to protect the information from third-party disclosure, however that may not protect a business from the damage caused by their competitor’s access to that information. Businesses must ensure that trial courts follow proper procedure for trade secret discovery in business litigation. Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

A recent example of this occurred in the case of Lewis Tree Serv., Inc. v. Asplundh Tree Expert, LLC, 2D20-493, 2020 WL 5739751 (Fla. 2d DCA Sept. 25, 2020).  Lewis Tree Service, Inc. (Lewis Tree) and Asplundh Tree Expert, LLC (Asplundh) were competitors in vegetation management, which generally included tree pruning and removal, right-of-way clearing and maintenance, and emergency storm removals for cities, counties, and utility companies. Both Lewis Tree and Asplundh had contracts with Duke Energy in the north central region of Florida, covering different portions of the larger region. Their contracts were set to expire at the end of 2017, and both Lewis Tree and Asplundh intended to bid for new contracts. Asplundh fired one of its supervisors, Juan Angel Garza (Garza), for reasons unrelated to the current dispute. While employed with Asplundh, Garza had a signed noncompete agreement. Shortly after Garza was fired, he allegedly started working with Lewis Tree as a “consultant” in violation of the terms of this noncompete agreement, and he allegedly began recruiting Asplundh’s foremen and skilled workers on behalf of Lewis Tree. The alleged result of Garza’s efforts and those of the foremen he recruited was that more than sixty Asplundh employees—primarily the higher-skilled climbers—quit in late September and early October 2017. The majority of these workers were hired by Lewis Tree and left Asplundh’s north central region severely understaffed.

Asplundh filed a lawsuit against Lewis Tree, among others, for tortious interference with Garza’s noncompete agreement and alleged that Lewis Tree, Garza, and the foremen conspired to convince the skilled workers to breach their duty of loyalty to Asplundh. The trial court granted summary judgment in favor of Lewis Tree on the tortious interference claim, which left the conspiracy to steal skilled workers count as the only claim left against Lewis Tree. Asplundh served Lewis Tree with a request for production of the complete set of bid documents that Lewis Tree submitted for the Duke Energy contract in late 2017. Lewis Tree refused to disclose the requested documents because they contained trade secret information. Asplundh filed a motion to compel.

Florida law permits a business to seek an injunction when its trade secrets have been misappropriated.  This can be a deceptively complex process for companies that are not familiar with trade secret law.  To prevail on a motion for a temporary injunction, a plaintiff must not only show that what was taken qualifies as a trade secret, but that the circumstances meets all of the elements necessary to prevail on a temporary injunction.  The failure to prove one element of trade secret misappropriation or the failure to justify an injunction can result in the denial of a temporary injunction.  A recent case before Florida’s Fourth District Court of Appeal explored the necessary elements that must be met before a business is entitled to a temporary injunction.  Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in trade secret litigation, non-compete agreement litigation, breach of contract litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

A plaintiff seeking a temporary injunction to protect its trade secrets must show that there is an actual or likely misappropriation of trade secrets and that the circumstances justify the entry of a temporary injunction.  To show a misappropriation of a trade secret under the Florida Uniform Trade Secrets Act (FUTSA), a business litigation plaintiff must show that another party acquired or disclosed a “trade secret” and that the party “knew or had reason to know” that the it was taken under improper means.  § 688.002(2), Florida Statutes. The legal term “trade secret” is defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process that [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”  § 688.002(4), Florida Statues.  To justify a temporary injunction, a plaintiff must show that “(1) irreparable harm will result if the temporary injunction is not entered; (2) an adequate remedy at law is unavailable; (3) there is a substantial likelihood of success on the merits; and (4) entry of the temporary injunction will serve the public interest.”  Donoho v. Allen-Rosner, 254 So. 3d 472 (Fla. 4th DCA 2018).

In Mapei Corp. v. J.M. Field Mktg., Inc, 295 So. 3d 1193 (Fla. 4th DCA 2020), Florida’s Fourth District Court of Appeal evaluated whether a temporary injunction was properly entered in business litigation concerning alleged trade secrets involving a business method.  The plaintiff was a full-service fulfillment and marketing firm.  The defendant was a chemical company that entered into an agreement with the plaintiff which involved access to a web-based inventory management software program.  Included in this agreement were confidentiality provisions concerning disclosure of the plaintiff’s software.  The defendant became unsatisfied with the plaintiff and requested that another vendor provide similar services.  To make sure that the services provided were the same, the defendant accessed and “scraped” the data from the plaintiff.  The vendor thereafter emulated plaintiff’s services for defendant.