The unauthorized use of someone else’s subscription password can result in multi-million dollar liability. %CUT% eVestment Alliance LLC offers a subscription to its trade secret protected database of investment products and performance data. An eVestment subscriber hired Compass iTech LLC to help analyze the eVestment’s data. Compass then used the subscriber’s password about 3,000 times to download information from eVestment’s database for its own benefit. eVestment discovered the activity and shut off access to the database. Compass sued for defamation and unfair trade practices. eVestment counterclaimed. eVestment was granted summary judgment on all of Compass’ claims. On eVestment’s counterclaim, a jury found that Compass deliberately misappropriated eVestment’s trade secrets and violated the Computer Fraud and Abuse Act. The jury awarded eVestment $2.5 million in compensatory damages and $1.2 million in punitive damages.

Consider a typical retirement plan sponsored by a private employer. The employer is a fiduciary to the plan along with employees who individually serve as trustees or members of the plan’s investment or retirement committee.

The denizens of Bikini Bottom could be confused by a real Krusty Krab restaurant. %CUT% Viewers of the cartoon, SpongeBob SquarePants, are familiar with the underwater (and, of course, fictional) eatery, The Krusty Krab. When IJR Investments, LLC wanted to register the trademark, “The Krusty Krab”, for a dry land real restaurant, Viacom International, Inc., sued for trademark infringement, unfair competition and other causes of action. IJR argued that Viacom never registered the trademark and Viacom only has a fictional restaurant. So, IJR argued, it was free to use the name. The court rejected IJR’s arguments. The court looked at Viacom’s use of the name. It appeared in 166 out of 203 SpongeBob episodes over the 17 year run of SpongeBob. There were 2 successful movies and substantial merchandizing. Viacom’s substantial use for 2 decades established that the name acquired secondary meaning in the minds of consumers. Thus, Viacom had established enforceable common law rights in the name. The court entered judgment in favor of Viacom on its trademark and unfair competition claims.

The good news is that the parties settled their trade secret litigation. The bad news is the release language in the settlement agreement. %CUT% Security Camera Warehouse, Inc. sued Bowman, one of its former owners, for trade secret misappropriation. During the settlement negotiations, unbeknownst to Security Camera, Bowman still had access to Security Camera’s servers and downloaded Security Camera’s trade secrets. After the parties signed a settlement agreement, Bowman set up a new company and competed with Security Camera using the information he took during settlement negotiations. Security Camera brought a second suit against Bowman for trade secret misappropriation. The court held that Security Camera’s claims were barred by the release in the settlement agreement from the first case. The language specifically released Bowman from any claims that Security Camera may have in the future based on events that occurred before the execution of the settlement agreement.