Innovators Can Sleep at Night if Their Trade Secrets Are Well Protected

Trade secrets are considered the oldest form of intellectual property in the world, and in the 21st century trade secret assets may become the largest, most lucrative driver for the United States in a world that largely tolerates theft of innovation. The motto “Don’t Innovate, Imitate” need not be an issue, though, when trade secret assets are well-protected.

Depending upon the type of trade secrets case, plaintiffs’ outcome may be more favorable when they elect to file in State courts, because of the “Uniform Trade Secrets Act” UTSA and its flexibility.

The UTSA has been a great success, with 99 percent of US states implementing its provisions. However, the Uniform Act does not encompass remedies for criminal prosecution. This has led to some jurisdictions adopting their own criminal law in respect to trade secrets.

By example, the adoption of criminal sanctions by California of the Penal Code § 499c, covers criminal prosecution for misappropriation of trade secrets.

Protection for misappropriation of trade secrets differs substantially between the California penal code and the recent “Defense of Trade Secrets Act” (DTSA) – Defend Trade Secrets Act. For example, Cal. Penal Code § 499c does not provide for the protection of trade secrets in the course of prosecution. Whether in practice California courts will protect the confidentiality of a trade secret, is dependent upon pursuit of protective relief from the Court.

In contrast, the DTSA requires the court to “take such . . . action as may be necessary and appropriate to preserve the confidentiality of trade secrets,” and creates a right of interlocutory appeal from any decision or order authorizing or directing the disclosure of a trade secret for the United States Government when prosecuting theft of trade secrets. Further, section 1835 of the DTSA as amended, additionally prevents courts from directing the disclosure of any information the owner asserts to be a trade secret without first allowing the owner to submit under seal a description of their interest in keeping the information confidential, and explicitly dictates that “the provision of information relating to a trade secret to the United States or the court in connection with a prosecution under that chapter shall not constitute a waiver of trade secret protection.”

In California, offenders convicted of theft of trade secrets under section § 499c of the penal code are guilty of theft, which (assuming the value of the secret(s) stolen is above $950). It can be a felony punishable by imprisonment up to three years (pursuant to the sentencing guidelines codified in Cal. Penal code § 1170h) and required restitution (Cal. Penal code 487). Further, § 499c codifies specific penalties, including imprisonment not exceeding one year (pursuant to the sentencing guidelines codified in Cal. Penal code § 1170h), or fines up to $5,000, or both, for those who induce another to misappropriate a trade secret.

The DTSA provides for significantly steeper penalties: imprisonment up to ten years, or fines up to $250,000 (18 U.S.C. § 3571), or both, or for organizations that engage in theft of trade secrets, fines (recently increased by the DTSA) up to the greater of $5,000,000 or three times the value of the trade secret to the organization (includingthe avoided cost of research and development).

DTSA further provides explicit immunity from criminal liability for whistle blowers, while Cal. Penal Code 499c has no such provision. The language of the elements of trade secret theft in § 499c is drafted in such a way as to appear to leave open to criminal prosecution of someone who acts with the intent to appropriate a trade secret even if they do so exclusively for the use of a law organization or other appropriate enforcement entity in the event of a “whistle blower” scenario. The Federal statute is explicitly applicable to foreign acts.

And, the DTSA dictates that §§ 1831-39 apply to conduct occurring outside the United States if the offender meets the following criteria: is a U.S. citizen or permanent resident alien, or a corporation organized in the U.S., or if an act in furtherance of the offence was committed in the U.S. Cal. Penal Code § 499c is subject to the limitations of the extraterritoriality of California criminal law generally.

Key Differences Between the Federal Criminal Statute and the California Statute Relating to Theft of Trade Secrets

Accordingly, the key differences between the federal criminal statute and the California statute dealing with criminal conduct is that the federal statute provides a procedure which is efficient and, at the same time, protects the confidentiality of the trade secret. Further, the procedure against criminal conduct is stricter with DTSA.

Under the DTSA federal courts operates under a single, national standard for trade secret misappropriation and a transparent set of procedural rules, offering predictability and ease of use. Second, federal courts provide nationwide service of process and a unified approach to discovery, enabling quick action by trade secret owners even when confronted with actors in multiple jurisdictions. Third, as a result of their extensive experience with complex cross-border litigation involving intellectual property, federal courts would be able to resolve jurisdictional issues quickly and applications for injunctions or seizures fairly. Fourth, their generally more predictable discovery procedures will serve the legitimate needs of trade secret plaintiffs, who typically must develop most of the facts to prove their case through defendants and third parties.

Finally, while the DTSA is not preemptive and would allow litigants a choice to sue in state or federal court, the opponents fail to explain why having that choice should be deemed undesirable “forum-shopping,” any more so than in other areas, such as trademark and securities law, where concurrent state and federal jurisdiction has long existed.

If you’re looking for protection outside criminal acts, then the UTSA offers, essentially, reliably case law that can be highly beneficial to companies that operate across state lines and that have relied upon established commercial trade secrets standards. Thus, the trade secret protections that have been enacted for many years under the uniform trade secrets act provide reliable safeguards for the majority of trade secret disputes.

However, if is a plaintiff is seeking criminal sanctions, it may be prudent to proceed under the DTSA.

Glossary:

Uniform Trade Secrets Act (UTSA)

Defend Trade Secrets Act (DTSA, 18 usca)

Cal Penal Code section § 499c

Principals In Los Angeles Law Firm, Shaub & Williams Join Irvine-Based Wilson Keadjian Browndorf, LLP

LOS ANGELES – Attorneys David R. Shaub, Leslie Williams, and Lisbeth Bosshart Merrill have joined the law firm of Wilson Keadjian Browndorf, LLP (WKB), a bicoastal, full-service white shoe firm. This move will expand the firm’s practice areas in patent litigation, intellectual property, and international business. Shaub will remain in the West Los Angeles office as WKB’s Managing Partner, and Williams and Merrill will work at the Firm’s flagship Irvine, California office. Williams will be a Corporate Transactions partner, while Merrill will head up the Firm’s Commercial Litigation Department.

David Shaub, whose primary interest lies in complex litigation and intellectual property protection, founded Shaub & Williams, LLP, in 1984. Leslie Williams, who later came onboard, specialized in European Union and transactional law, and was subsequently joined by Lisbeth Bosshart Merrill, whose practice areas include business litigation and transactions, international commercial arbitration, and intellectual property law with an emphasis on intellectual property litigation.
According to WKB Managing Partner Matthew Browndorf, the firm seeks to bring attorneys together who have extensive capabilities and a broad sphere of influence in the business communities from which they draw their clients.

“The Shaub & Williams team will add a dimension to WKB that focuses on the specialized legal areas that we are looking to expand, based upon client demand,” says Browndorf.

WKB has offices in New York, New Jersey, Pennsylvania, Maryland, Washington DC, Illinois, Indiana, Wisconsin, Arizona, Nevada, Cologne, Germany (non-affiliate office); and London, England, with over 30 attorneys specializing in a comprehensive array of legal matters. They range from administrative law, to commercial litigation, intellectual property, information technology, real estate, structured products, and private equity.

Building & Nurturing Relationships at ABS Vegas 2016

WKB sponsors one of the largest capital market conferences

WKB is proud to have attended the ABS 2016 conference held in Las Vegas Nevada from February 28th – March 2nd.  This conference is put on by the IMN and SFIG organizations and was attended by more than 6,000 of the most intelligent and prolific players within the capital markets; including, financial institutions, asset managers, regulatory agents and seasoned veterans from across the world.

The WKB team was honored to participate and help sponsor this event, it truly was an event to remember.  New relationships were formed and lasting friendships were nurtured while WKB’s Structured Products Group explained how the team plans to innovate within this dynamic market.

Thank you to all of those who visited the WKB booth and shared in the memories that is ABS Vegas 2016.


Matthew C. Browndorf and Jennifer Wilson-Harvey Unwind Affiliation

IRVINE, Calif.–(BUSINESS WIRE)– Matthew C. Browndorf , the principal of Plutos Sama, LLC and Jennifer Wilson-Harvey, the principal of Wilson & Associates, PLLC, announce that as of October 1, 2015 they have formalized a transaction dissolving their affiliation and unwinding their minority ownership interests in Wilson & Associates, PLLC, and Wilson Harvey Browndorf, LLP and BP Law Group, LLP, respectively.

BP Law Group, LLP, founded in 2011 by Matthew C. Browndorf, a former Bryan Cave, LLP attorney, is a nationwide law firm dedicated to the liquidation of asset backed loans, nonperforming commercial and residential loans, mortgages and deeds of trust, and other real estate finance instruments. BP Law Group clients are owners of large portfolios of distressed commercial and residential real estate, who seek a one-stop solution to liquidate and monetize their portfolios.

Wilson & Associates, a law firm headquartered in Little Rock, Arkansas, with offices throughout Arkansas and Tennessee was founded in 1978 by the late Robby Wilson (1952 – 2012) to focus on the needs of banks and mortgage servicers. Jennifer Wilson-Harvey is the Managing Member of Wilson & Associates.

Wilson Harvey Browndorf, LLP, founded in 2013, is a white shoe, full-service law firm whose model is in line with the AM LAW 100 law firms. Its partners are former partners, counsel and associates from the largest U.S. law firms such as Bryan Cave, LLP, O’Melveny & Myers, LLP, White & Case, LLP, Thacher Proffit & Wood, LLP, Buchanan Ingersoll, P.C., Edwards Angell, LLP, Sullivan & Cromwell, LLP. They also hail from Ivy League law schools and top colleges such as Loyola and Columbia, and various schools from the University of California.

As a result of the unwinding announced today, neither Matthew C. Browndorf nor his holding company, Plutos Sama, LLC, has any ownership interest in Wilson & Associates, PLLC and Jennifer Wilson-Harvey has no ownership interest in BP Law Group, LLP and Wilson Harvey Browndorf, LLP. Due to the departure of Jennifer Wilson-Harvey from Wilson Harvey Browndorf, LLP, the firm will be changing its name and is pleased to announce it will continue to provide its clients exceptional legal services under the new name Wilson Keadjian Browndorf, LLP.

About PLUTOS SAMA, LLC: Plutos Sama is a vertically integrated holding company, providing its clients with the legal resources needed to develop across a variety of sectors, asset classes and regions around the globe. The value add came in the form of being a one-stop-shop for our clients. Financing, technical expertise and business advice in countercyclical environments were necessary to add to business and increased partnerships. This is why we provide Plutos Sama. To learn more, please visit www.plutossama.com.

Rusama Limited, LLC Attends 4th Annual Kurdistan-Iraq Oil and Gas Conference

Rusama Limited, LLC Attends 4th Annual Kurdistan-Iraq Oil and Gas Conference

(New York, New York – December 7, 2014)  December 16-18, 2014, marks the 4th annual Kurdistan-Iraq Oil and Gas Conference supported by the Kurdistan Regional Government (the “Conference”). Rusama Limited, LLC (“Rusama”), a subsidiary of Plutos Sama, LLC, a Delaware Limited Liability Company, is in attendance of the Conference, among H.E. Nechirvan Barzani, Prime Minister of Kurdistan, Kurdistan Regional Government of Iraqi Kurdistan; H.E. Dr. Rowsch N. Shaways, Deputy Prime Minister, Federal Government of Iraq; H.E. Dr. Ashti Hawrami, Minister of Natural Resources, Kurdistan Regional Government-Iraq; H.E. Falah Mustafa Bakir, Head of the Department of Foreign Relations, Kurdistan Regional Government, Iraq, to name just a few of the influential Conference speakers. For a complete list of the 2014 Kurdistan-Iraq Oil and Gas Conference speakers go to http://www.cwckiog.com/2014-conference/speakers/.

Rusama’s attendance is fueled by discussions of potential oil ventures and future business in petroleum products. Rusama attended the Conference to connect with top leaders in the Oil & Gas industry to ignite potential future business. Rusama is represented in the U.S. and London by its affiliate law firm, Wilson Harvey Browndorf, LLP (www.whpllp.com).

December 16, 2014, the day before the Conference commenced, encompassed legal workshops regarding the Iraqi Legal Framework for Oil & Gas and Overview of Key issues under Iraqi Law, Fiscal Terms in Iraq’s Petroleum Contract, Iraq’s Petroleum Contracts, Iraqi Tax Regime, and Upstream Mergers and Acquisitions in Iraq and Kurdistan. Additionally, on December 16, 2014 technical workshops were held encompassing Oil Field Services, Requirements for Oil Fields, Introduction to Oil & Gas Solutions, and Recruitment for the Oil & Gas Industry Operations.

December 17, 2014, the first day of the Conference, presented Ministerial Keynote speeches, Kurdistan’s Vison for 2015 Expansion, Enhancing Upstream Infrastructure Development Projects, and Accelerating the Future of the Oil & Gas Assets & Projects.

December 18, 2014, the last day of the 2014 Kurdistan-Iraq Oil and Gas Conference presents Keynote speeches, Natural Gas Utilization to Fuel the Energy Expansion, Financial Opportunities: Evaluating the Role of Strategic Investors in the Region, Strategic Investments in Local Capability to Create Sustainability, and Concluding Ministerial Panel: Local Content in the Region: Accelerating the Plans for Economic Development in all Sectors in the Region.  For the complete Conference schedule go to http://www.cwckiog.com/conference-programme/.

 

About Rusama Limited, LLC

RUSAMA LIMITED, LLC is a dedicated crude oil trading company, facilitating purchases & sales of petroleum products across the globe. A subsidiary of Plutos Sama, LLC, a California Limited Liability Company, Rusama Limited is represented in the U.S. and London by its affiliate law firm, Wilson Harvey Browndorf, LLP (www.wkbllp.com). Wilson Harvey Browndorf handles all of the legal and transactional due diligence, purchase and sales terms.

Wilson Harvey Browndorf, LLP Prepares Clients for 2015 EB-5 Program – 2014 Quota Met

NEW YORK–(BUSINESS WIRE)–Quotas in immigration are no new thing. Work Visas typically fill their quota every year around June or July leaving all immigrants looking to work in the United States having to wait until January of the next year to file for status. But for the first time in its 24 year history, the EB-5 program has hit its annual quota of 10,000 visas per year. This comes on the heels of Canada shutting down its program after a large backlog. The backlog in Canada and the meeting of the quota in the United States for the first time are largely attributed to the influx of wealthy Chinese investors. EB-5 immigration status awards visas to immigrants who invest $500,000 to $1 million in a U.S. business. Applicants who can prove that their investment has created at least 10 jobs get permanent green cards. The program’s popularity has exploded in recent years — the number of applicants vying for the annual allotment of 10,667 visas has doubled nearly every year since 2009. An estimated 85% of the EB-5 funds in 2014 have come from China. That money been used to build projects across California and elsewhere, including the JW Marriott hotel at L.A. Live in downtown Los Angeles.

As of fiscal year 2012, the U.S. Citizenship and Immigration Services (USCIS) agency estimated that the program had created at least 49,000 jobs. The USCIS said the EB-5 has generated more than $6.8 billion in new investment since its inception in 1990. It’s popular with Republicans and Democrats who tout the program’s potential to create jobs. Changes in the EB-5 program had been included in a comprehensive immigration reform bill that languished in Congress for two years before collapsing this summer. At a July EB-5 convention in Newport Beach, Rep. Bob Goodlatte (R-Va.) called the delays unacceptable and promised reforms to an audience of attorneys and investors. “This is a tremendous boon to our economy,” Goodlatte said. In May, Goodlatte and Rep. Darrell Issa (R-Vista) introduced a proposal to streamline the application process and increase the number of visas available to the EB-5 program. The bill is still in committee.

Wilson Harvey Browndorf LLP operates an Elite EB-5 and Global Investment Division from its offices in Irvine, California and New York, New York. Led my Firm Managing Partner, Matthew Browndorf and the practice groups co-managing member, John Hayner, both Browndorf and Hayner have advised clients currently considering the EB-5 Visa as part of their global investment strategies in the United States to have their applications prepared before the year end so they are first in line for the January filings in 2015. John Hayner said, “Much like rising interest rates in home mortgages will cause an increase in new home sales from a rush of buyers to lock in lower rates, we expect the meeting of the EB-5 quota to cause a rush in preparatory legal work over the next quarter so applicants are ready with their finger on the button come January 1, 2015.” Stella Wang, MBA, who works at Wilson Harvey Browndorf’s Irvine office, said, “The EB-5 program is particularly attractive to Chinese investors who are already making an investment in the United States as part of a merger and acquisition activity.”

 

Contacts

Media:
Wilson Harvey Browndorf, LLP
Justin Palermo, 800-690-5557
jpalermo@whbllp.com

Charitable Giving Prominent in Irvine Law Firm, Wilson Harvey Browndorf, LLP

WHB’s philanthropic efforts keep pace with company growth  

IRVINE, CA (BUSINESS WIRE) – Wilson Harvey Browndorf (“WHB”) continues their charitable giving with their generous donation to the Juvenile Diabetes Research Foundation (“JDRF”). On May 22, 2014, L.A. Car Connection joined with JDRF for their 3rd annual Track Day Invitational at Willow Springs International Raceway. The JDRF’s goal of improving the lives of every person affected with Type 1 Diabetes took one more step, as they successfully raised over $24,000 on Track Day. The challenge of fast speeds, swift turns, and challenging elevations matched the enthusiasm and support displayed by the WHB team, who was happy to make contributions to the cause.

This continues a trend for the WHB team and their active role in participating in charitable organizations that hold sentimental meaning to individuals in the WHB team. Last November, firm managing partner Matthew Browndorf, Sarina Browndorf, and Anthony Arnold attended the Diamond Ball at the Ritz-Carlton in Laguna Niguel to support the Wounded Veterans Initiative of Canine Companions for Independence and the Friends of Orange County’s Homeless Pets. “Our military veterans are a very important part of our community and have been severely underserved for far too long, the Diamond Ball proudly represented those who fought for us,” said Anthony Arnold, senior associate at the WHB Irvine office.  In 2012, Chris Shea, the non-lawyer managing member of WHB’s affiliate, BP Law Group, made a presentation and testimonial of his personal connection with the Hope Foundation.

 

About Wilson Harvey Browndorf, LLP

Wilson Harvey Browndorf LLP is an international law firm with core offices in New York, California, Washington, D.C. and Arkansas. Focused on the needs of business and finance clients in mergers and acquisitions and business and insurance litigation, Wilson Harvey Browndorf LLP is managed by Firm Managing Partner, Matthew C. Browndorf, resident in the New York City office. For more information about the services provided by Wilson Harvey Browndorf LLP, please visit our website at http://whbllp.com/.

 

About BP Law Group, LLP

In an economic climate where more and more individuals are defaulting on mortgages, credit cards, loans and other financial obligations, BP Law Group has in place proven processes to help clients recover overdue balances as quickly and effectively as possible. With hubs in California, Texas and New York, the firm provides debt collection and a wide range of other legal services from offices around the world. The firm’s geographic diversity and extensive investments in technology enable its high-caliber professionals to efficiently cater to clients in the world’s leading business and financial markets. For more information, please visit www.bplawgroup.com.

 

Media Contact:
Justin Palermo
Email: jpalermo@whbllp.com