A California case that settled a key area of law concerning trade secret misappropriation has been named one of the state’s most significant verdicts by the Daily Journal and earned Alston & Bird a spot on its annual list of “Top Verdicts.”
One of only 20 top defense verdicts highlighted by the publication, the case – Manchester v. Sivantos GmbH, et al. in the U.S. District Court for the Central District of California – confirmed the limitation of trade secret protection when copyright protection is simultaneously sought and how restricting the scope of what is confidential in a nondisclosure agreement can overcome claims of trade secret misappropriation and breach of a nondisclosure agreement. The case was filed by plaintiff Deborah M. Manchester, Ph.D., regarding a tele-audiology software application against Sivantos GmbH, a German-based manufacturer of hearing aids, and Sivantos Inc., a U.S. entity.
The Sivantos legal team was led by Alston & Bird partners Yuri Mikulka, Mike Newton, James Abe, and Chris McArdle and senior associates Caleb Bean and Wade Perrin of the firm’s Intellectual Property Litigation Group.
In a motion for summary judgment, Sivantos told the court that Manchester could not prove trade secret misappropriation because she lacked a protectable interest, and she could not prove that Sivantos misappropriated the alleged trade secrets since she had previously tried to register the alleged trade secret without redactions with the U.S. Copyright Office. The motion further stated that Manchester’s contractual claims failed because she failed to designate any materials as “confidential” as required under the terms of the nondisclosure agreement.
California federal judge Otis Wright II granted Sivantos’ motion and dismissed the claims in their entirety. Despite Manchester ultimately being unsuccessful in obtaining a copyright registration of the material she submitted, Judge Wright determined that she nonetheless lost her trade secret protection on the materials submitted, commenting that “courts have consistently denied the existence of a trade secret where, as here, the claimed trade secret is submitted without redaction for registration with the United States Copyright Office.”
The Daily Journal is California’s largest newspaper covering the legal industry. Its annual “Top Verdicts” features the largest and most significant actions and appellate reversals in California in 2019.