http://www.law.com/jsp/article.jsp?id=1202421887158 By Zusha Elinson The Recorder June 3, 2008 A California appellate court has clarified when the clock starts ticking for trade secret holders to sue third parties who have acquired their stolen intellectual property. Three years after filing a suit over stolen computer source code, the subsequently victorious plaintiff also sued the defendant's customers for having acquired the proprietary information. At question was when the three-year statute of limitations had started -- when the plaintiff filed its original suit, or when it won. The San Jose-based 6th District Court of Appeal ruled that the timer starts when the plaintiff has "any reason to suspect" that the third party knows it received tainted goods. That means that software maker Silvaco, which sued Circuit Semantics Inc. in 2000 and won the trade secrets case three years later, must go back to the trial court to argue the facts in its subsequent suit against Cypress Semiconductor Corp. Silvaco, which sued Cypress in 2003, must establish when it first suspected that Cypress was aware it had purchased stolen IP from Circuit Semantics. The Friday opinion caught the attention of tech companies and their lawyers because of the frequency of trade secret cases in the industry. Rebecca Edelson, a Steptoe & Johnson IP lawyer, called Judge Eugene Premo's 14-page ruling a mixed bag, with advantages for both sides in a trade secrets fight. "If you look at trade secret holders, it's a victory in the sense that they can't lose the rights before they know about them," said Edelson, who co-edits the State Bar's book, "Trade Secret Litigation and Protection in California." "On the other hand, it's a victory for the third parties who may be misappropriating trade secrets, in the sense that the court is placing a burden on the trade secret holder to act." [...] _______________________________________________ Attend Black Hat USA, August 2-7 in Las Vegas, the world's premier technical event for ICT security experts. Featuring 40 hands-on training courses and 80 Briefings presentations with lots of new content and new tools. Network with 4,000 delegates from 50 nations. Visit product displays by 30 top sponsors in a relaxed setting. http://www.blackhat.com
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