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North America: Does inclusion of ‘ideas’ and ‘know how’ in Confidential Information and Invention Assignment Agreements constitute an unenforceable non-compete under California law?

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In brief

The North America Trade Secrets Practice discusses a novel argument asserted by two defendants in an ongoing trade secret misappropriation case filed by Cisco in California federal court that has the potential to impact almost every company’s Confidential Information and Invention Assignment Agreements, both in California and beyond.

Bradford Newman, Anne Kelts Assayag, Colton Long discuss the former employees assertion that by classifying their ‘know-how,’ ‘ideas,’ and any information concerning Cisco’s ‘actual or anticipated business’ as ‘proprietary,’ Cisco is attempting to achieve by contract what the law specifically disallows. “Cisco cannot claim ‘ownership’ over [their] know-how and ideas and then assert that alleged ownership to prevent [these employees] from working” for a competitor.

So is this argument too esoteric to be of concern, or something that companies need to understand and address?   Is  this attack on standard Confidential Information Agreement provisions limited only to California, or does it have the potential to spread to other jurisdiction?  Our North America Trade Secrets Practice members provides insight on these and related issues.

Click here to access Focus on Trade Secrets.

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Author

Bradford Newman is a litigation partner resident in Baker McKenzie's Palo Alto Office and Chair of the North America Trade Secrets Practice. According to Chambers USA, Brad is a "recognized authority on trade secrets cases" who "is valued for his tenacious, intelligent and thoughtful approach to trade secrets matters." Bradford regularly serves as lead trial counsel in cases with potential eight and nine-figure liability, and has successfully litigated (both prosecuting and defending) a broad spectrum of trade secrets cases in state and federal courts throughout the country. He routinely advises and represents the world's leading technology, banking, professional service, manufacturing and commerce companies in connection with their most significant data protection and trade secret matters. Bradford is the author of Protecting Intellectual Property in the Age of Employee Mobility: Forms and Analysis, a comprehensive treatise published by ALM that offers authoritative guidance on legal risks and practical steps companies can take to protect their IP and remedy IP theft.

Author

Anne Kelts Assayag is a litigation associate in Baker McKenzie's Palo Alto office. She represents domestic and multinational corporations involved in complex commercial litigation and consumer class actions in the United States. She is a member of the Firm's North America Trade Secrets Practice, the North America Class Action Group, and the North America Commercial Litigation Group, practicing in both the Consumer Goods & Retail and Technology, Media & Telecom Global Industry Groups. Prior to joining the Firm, Anne served as a law clerk for Honorable Judge James C. Mahan in the United States District Court for the District of Nevada.

Author

Colton Long is a senior associate in Baker McKenzie's Employment and Compensation Group. Colton litigates employment, business, and executive compensation matters nationwide, with a particular focus on cases involving securities whistleblower allegations, non-complete and trade secret litigation, and executive compensation disputes. Colton also regularly litigates and advises on matters under the Fair Labor Standards Act, the Family and Medical Leave Act, Title VII, and state and local equivalents. In addition to his wide-ranging litigation practice, Colton advises companies in a broad spectrum of employment-related matters involving mergers, acquisitions, and workforce restructurings, helping employers navigate the intricacies of state, federal and international laws governing such actions. As a devoted advocate, litigator, and advisor Colton prides himself on providing thorough and high quality services to companies nationally and internationally. In recognition of his work, Colton has been awarded a “Rising Star” designation by Super Lawyers magazine in both Illinois and Minnesota, a designation given to only 2.5 percent of attorneys in each state under 40 for excellence in practice.

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