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Another type of intellectual property could face more lawsuits

On Behalf of | May 8, 2019 | Intellectual Property

Lawsuits filed by patent trolls have been the bane of many companies over the years. The problem became so extensive that in 2016, Congress passed the Defense of Trade Secrets Act in an attempt to stem the flow of these lawsuits in order to allow them into federal court since they were ordinarily filed in state courts, including those here in New York. Unfortunately, it now appears that this opened up this type of intellectual property to patent-troll type lawsuits.

Another matter that could hasten an increase in litigation regarding trade secrets is a lawsuit filed in 2015. The plaintiff alleged that the defendant failed to deliver software it needed. The defendant then filed a countersuit alleging that the plaintiff took its trade secrets and developed its own software. The jury and judge on the case agreed and awarded millions of dollars in damages to the defendant.

The problem is that many of the defendant’s employees came forward to say that no trade secrets were ever taken or used by the plaintiff. In fact, software such as the plaintiff needed already existed for years prior to this action. Even so, the plaintiff must now expend the time, effort and funds appealing the decision.

Intellectual property is a valuable asset for companies who use it and companies who abuse it. Patent trolls have cost companies in a variety of industries substantial amounts of money. By the time they are done litigating a matter, the financial losses may not be worth the settlement offers extended prior to litigation. These lawsuits used to focus primarily on patent, trademark or copyright infringement, but they could now extend to trade secrets.