Commercial Litigation, Securities Litigation and Dispute Resolution Services in Pittsburgh, PA
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Trade Secrets Litigation

Trade Secrets Litigation

Proficient in handling trade secret misappropriation claims & non compete agreements

Claims alleging the misappropriation of trade secrets arise in a number of contexts, most commonly when former employees who have possession of the intellectual property leave their employer to work for a competing business.  These claims are generally brought under the Pennsylvania Uniform Trade Secrets Act (PUTSA) and various common law causes of action.  Although PUTSA preempts certain common law claims, claims for misappropriation, conversion and other common law claims may be asserted in certain circumstances, when a business’s trade secrets or other business assets are misappropriated.  In addition, in 2016 Congress enacted the federal Defend Trade Secrets Act (DTSA), which for the first time (beyond certain misappropriation claims that have been allowed to proceed under the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030) provided for a federal cause of action for trade secret misappropriation.  DTSA provides companies that desire to pursue claims for trade secret misappropriation the opportunity to do so in federal court, and since effective date of the statute (May 11, 2016), a variety of cases have been decided under the Act.

Mr. Betts is knowledgeable concerning the substantive law underlying claims for misappropriation of trade secrets claims, but also is experienced in the procedures that apply in Pennsylvania state courts and in federal courts for addressing these claims.  In nearly all cases involving the alleged misappropriation of trade secrets (and alleged violation of restrictive covenants), the plaintiff requests a preliminary injunction.  There are strict elements that must be met to support a request for preliminary injunctive relief.  In addition, these requests usually require proceedings that are highly expedited, requiring counsel to understand how to effectively investigate, discover and develop the facts of the case, and to be prepared to try the case, within a compressed period of time.

Restrictive Covenant and Non-Compete Litigation

Restrictive covenants, more commonly known as non-compete agreements, seek to restrict the right of an employee to compete with his or her prior employer in a competing business or prohibit contact with prior clients, customers or long time business contacts.  The covenants are often included in employment agreements, incentive compensation plans, and stock options plans.

Because Pennsylvania courts regard restrictive covenants and non-compete agreements as restraints of trade, an employer seeking to enforce such a provision bears a heavy burden.   Among other requirements, in order for a restrictive covenant or non-compete agreement to be enforceable, it must be "reasonably related to the protection of a legitimate business interest."  Hess v. Gebhard & Co., 808 A.2d , 912, 918 (Pa. 2002).  The type of interests that have been recognized as protectable include trade secrets or confidential information, unique or extraordinary skills, customer goodwill, and investments in an employee specialized training program.  In contrast, post-employment covenants that merely seek to eliminate competition per se to give the employer an economic advantage are generally not enforceable.  Further requirements for enforceability relate to the standard of "reasonableness."  As Judge Christine Ward observed in the case of Red Oak Water Transfer NE, LLC v. Countrywide Energy Services, LLC, No. GD-11-17598, 2012 Pa. Dist. & Cnty. Dec. LEXIS 236 (C.P. Alleg. July 12, 2012), relying on the case of Insulation Corp. of America v. Brobston, 667 A.2d 729 (Pa. Super. 1995), a court's determination of the reasonableness of a restrictive covenant involves a balancing of the competing interests of the employer's need for protection against the hardship of the restriction to be imposed upon the former employee. 


For additional information about the services provided by Michael J. Betts LLC relating to trade secrets and restrictive covenant litigation, please contact Mr. Betts by telephone at 412-397-9933 or via email:  mbetts@bettsllc.com

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