Trade Secrets in Fashion Law

By Emily Wilk

Trade secrets are a compelling aspect of intellectual property (IP) law.  There are many conditions that must be met to consider a certain piece of information or invention a trade secret, however there is no application to file to the United States Patent and Trademark Office (USPTO) for the rights to secure this secret.  Throughout IP law, there is a heavy reliance on the copyrights, trademarks and patent rights that designers attain to protect their ideas and designs from being stolen or copied.  These rights to the protection of their ideas can be easily accessed by a judge to determine whether a defendant has violated a plaintiff’s protections ensured under these laws. However, there is a more complex and intricate process in determining whether a trade secret was stolen or not.

First, consider the definition of a trade secret.  The Uniform Trade Secrets Act (UTSA) defines it as “information that includes a formula, pattern, technique or process that derives independent economic value that is not commonly ascertainable, and is subject of efforts to uphold its secrecy from other parties.”  To maintain the secrecy of the certain formula, pattern, technique or process, it is vital secure protection through confidentiality agreements.  These non-disclosure agreements ensure the outside party receiving the trade secret, in order to evaluate the inventor’s product, will keep the product information received classified (JOM).  Due to the multiple facets that can encompass a trade secret, there are many different forms of law that can facilitate the implications of a trade secret in their specific area.  

Within the mode of fashion law, many different attributes of information, such as formulas, pricing information, sourcing information and proprietary information technology, are fundamental trade secret protections (The Fashion Counsel).  However, in the world of red soled shoes and cheetah-print handbags, many find it hard to determine the difference between a patented design and a design created by a trade secret.  A patent exclusively demonstrates the product information and process of creation to the public if they wish to access it.  By disclosing this information, a designer ensures that their idea and design will be protected for a number of years, as a limited time monopoly, until the patent license is up, at which point it can either be renewed or expire (USPTO).  Trade secrets fly under the radar, allowing a designer  create a certain designs that, if kept confidential, may be kept forever with no limits or bounds protecting the idea. The secret itself is protecting the idea.

However, one must consider if a designer should designate their idea as a trade secret or a patent.  There is a process called reverse engineering in which other companies can take apart a product, in reverse order of putting it together, to determine the ways in which the product was made (NC State Ethics). When a company utilizes reverse engineering, it is to gain information that is integral to becoming competitive in the design market.  If a company were to apply reverse engineering onto a patented product, it would be illegal because the company that owns the patent has full rights to the creation of the product whether it is done forwards or backwards. In any direction, all of the rights legally belong to the designer who owns the patent.  However, products created by trade secrets are legally allowed to be reverse engineered, which could lead to the discovery of the secret by competing designers.

In a recent case of trade secret theft, Louis Vuitton is suing Coach for the secrets that the ex-Vice President of Louis Vuitton illegally carried over to her new position at Coach.  Joon Ma, the former VP of LV, had violated multiple facets of her contract at Louis Vuitton.  Firstly, Ma transferred confidential Louis Vuitton North America (LVNA) information from her work computer onto external hard drives.  She later deleted all emails pertaining to LVNA to cover her tracks.  Secondly, she violated her non-compete clause in her contract, which states that she may not join the team of a competing designer for six months after her resignation due to the secrets deeply invested in the fashion market. This is primarily concerning to LV because Ma was a valued executive who was always aware of the secrets traveling around the LV headquarters (Racked).

In this case, LV’s trade secrets were misappropriated from the inside and brought to a different company. This case shows that even with the most detailed non-disclosure agreements and contracts, a trade secret does not always remain a secret, especially in the world of fashion where one little expression or tell of secret information can lead to a total unwinding and loss of a designer’s own original idea.  

Current Migrant Crisis: Universal Human Rights?

By Kelli Jones

The past year has seen the largest mass migration since World War II. More than four million Syrians have fled the country since conflict began, often risking their own and their family’s lives in a bid for safety. Given the recent authorization of further air strikes in Syria by the US, France, Russia and now the UK, this number is only set to rise. Under International Law, countries have a legal obligation to accept refugees fleeing persecution and violence, yet the United Nations has accused many of breaking such commitments as their borders appear far from welcoming. Furthermore, even those who are accepted by border controls often face further rights violations by the very countries supposedly offering them sanctuary.

The right to seek and receive asylum is a fundamental provision granted for all individuals in the International Convention and Protocol Relating to the Status of Refugees 1967. Whilst some have suggested many of the migrants are moving for economic purposes, this is empirically incorrect as the UN Refugee Agency reported that a clear majority of those arriving in the EU in particular, are ‘fleeing from war, conflict or persecution;’ seeking asylum and survival rather than economic or work-related prosperity. Whilst these conditions inevitably evoke a moral obligation, they also evoke a legal one. Internationally, under the Convention Relating to the Status of Refugees, and further within Europe under the European Convention of Human Rights 1953, over 150 countries have a legal obligation to accept individuals seeking asylum.

The UN has particularly criticized Australia and the Czech Republic for their border processes, as they appear highly selective in the individuals they are allowing to cross their borders. Screening processes are essential to border control in order to ensure the safety of citizens, but countries appear to be considering the economic and skill level of applicants alongside criminal considerations. When horrific violence and possible death faces those who are not granted asylum, using this information to dictate who is turned away essentially places a higher value on the lives of those more economically prosperous or highly educated. This is both a moral atrocity and a legal undermining of the justification for granting asylum.

The border process in the Czech Republic has reportedly included routine strip-searching and detaining of refugees, including children, for up 90 days in what the UN describes as ‘degrading conditions,’ that the Czech Republic’s Minister of Justice Robert Pelikán described as ‘worse than in a prison.’ The UN Committee on the Rights of Children has deemed the subjection of such standards, for minors in particular, as unjustifiable. The right to challenge this detention is also largely inaccessible to migrants, given the lack of information provided and available to them regarding legal aid. While detained, refugees have even reported being forcibly charged for this detainment, even though the Czech Act on Asylum 1999 states all service and administrative charges for asylum seekers shall be ‘borne by the ministry.’

Australia also has a particularly disturbing refugee record. Even disregarding their international legal obligations, their own Australian Migration Act 1958 defines a refugee as an individual with a ‘well-founded fear of persecution’ and commits to accept those who fit this criteria. From a practical geographic perspective, many more refugees have sought asylum in the EU than Australia, however, the past months have seen Australian authorities turning boats of refugees back to Indonesia, clearly without the chance of a fair hearing or trial with regards to their migrant status. Countries such as Cambodia, where boats have been redirected to, have consequently criticized Australia, arguing that they already struggle to provide many services for their own people, implying further neglect and lack of responsibility on the part of Australia.

There are also clear discrepancies within Europe, as while Germany has committed to accepting over 800,000 refugees, the UK has pledged to accept just 20,000 over five years. Whilst the EU has the right to determine the distribution of refugees, as long as persecution will not be faced within any of the destinations, the most persuasive benefits of this clearly lie in the economic conditions of member countries, yet this is not dictating distribution. It is ironic that countries such as Greece who have faced serious economic upheaval are among the most readily accepting of refugees, whilst growing economies such as the UK and US are increasingly resistant to their acceptance. Even though discriminatory and xenophobic attitudes towards refugees may be present amongst many countries, the varying rhetoric of governmental institutions undoubtedly contributes to the quantity of individuals accepted, and the views of refugee policy by their respective citizens. The UK government in particular has emphasized its political agenda on immigration overall as it has committed to decrease net migration to the tens of thousands in the coming years, including asylum seekers. In vast contrast, the German Chancellor Angela Merkel has repeatedly refused to set a national limit on the number of refugees that will be accepted into the country, arguing the government cannot place a limit on the constitutionally enshrined right to asylum.

Even for those accepted through border controls however, the conditions for refugees does not appear to drastically improve. Camps within Calais commonly referred to as ‘The Jungle’ contains thousands of refugees, most hoping to enter the UK, living in extremely poor conditions. The NGO Medecines du Monde, recently filed a case against the French Court regarding ‘serious human rights violations’ within The Jungle. The group had initially hoped to gain temporary shelter and daily meals for all refugees, but was only granted water and hygiene provisions for those within the camp. The UN has been clear in stating that, regardless of the status of those entering foreign countries, governments’ have ‘the obligation to respect, protect and fulfill the human rights of all individuals under their jurisdiction.’ Whilst acting as a vital first step in increasing the standard of living for refugees therefore, the case may also set a significant precedent as the crisis continues, as many countries can be seen to be neglecting their own responsibilities when it comes to upholding international human rights standards.

When considering historical humanitarian atrocities such as the Holocaust, many societies are often horrified when reflecting on the refusal of nations to accept thousands of citizens fleeing the persecution of the Nazi sphere of control. Yet even today, with global institutions such as the United Nations, and international laws such as the Convention for Human Rights, too many refugees fleeing persecution are left stranded, or met within nations they hope to be their sanctuary, with further human rights violations.

The vast majority of those fleeing Syria and neighboring countries are fleeing terror, like the terrorist attacks seen in Paris, that they have endured on a daily basis. Refusal to offer an alternative to this, paired with the planned increase in air strikes, ultimately sees millions of Syrians without a future. If conditions do not drastically improve we can expect a powerful yet horrific precedent both legally and morally within the international environment that we are unlikely to look back on proudly.

SCOTUS to Rule on Rights of Veteran-Owned Businesses

By Brett Mittler

Considering the scandals, allegations of mismanagement and widely condemned disability claims backlog at the Department of Veterans Affairs (VA) in recent years , what would you think if they allocated money to support a business that was not a Veteran-Owned? Timothy Barton, the Chief Executive of Kingdomware Technologies, was angered by just that and decided to take legal action against the VA for awarding a contract to a non-veteran entity. Is Barton right that the VA should have only given these funds to support veterans in their  hopes of achieving the American Dream after serving our nation? Did the VA violate the law? The Supreme Court will rule on these issues in Kingdomware Technologies, Inc. v. United States.

The question presented is: Did the United States Court of Appeals for the Federal Circuit err in holding that the Veterans Act of 2006, 38 U.S.C. § 8127, allows the Department of Veterans Affairs discretion in deciding whether to award a contract to a veteran-owned business?

This policy has long been a part of the history of the United States to promote small businesses. The legislature has been pushing for more government support for small business owned and operated by veterans. As expressed in the Small Business Act, 15 U.S.C ch. 14A, which states,  “A fair proportion of the total purchases and contracts for property and services for the government [should go to Veteran Owned Small Businesses]” 15 U.S.C. . § 644(a)(3). The Small Business Act recognizes both Veteran Owned Small Business (VOSBs) and Service-Disabled Veteran Owned Small Businesses (SDVOSBs). Id. § 632(q).

     

However, the policies and procedure for government contracting is outlined in the Federal Acquisition Regulation (FAR), 48 C.F.R. ch 1. When purchasing supplies, all government agencies fall under the guidelines of the umbrella of FAR, which directs them to the Federal Supply Schedule (FSS). The VA was specifically given authority, under 48 C.F.R. § 38.101(d), to award other contract schedules, meaning they do not have to award them to VOSBs. In fact, they are awarded to VOSBs a smaller percentage of the time than they are to regular FSS contracts.

CASE BACKGROUND

Kingdomware Technologies is a company operated by a service-disabled Army veteran, Timothy Barton, in a suburb of Washington, D.C. Kingdomware provides a range of technology information services to both the private and public sector. It has been certified by the Department of Veterans Affairs as a SDVOSB in 2010 and again in 2012. Barton was wounded during Operation Desert Storm in 1991, when the US Military forced Iraq to back out of its invasion of Kuwait.

     

The technology firm has waged this legal battle on the grounds that the VA “shall” award contracts to veteran-owned small businesses and that they have failed to carry out its duty, as outlined in Id. § 8127(d). After winning a series of protests in the Government Accountability Office (GSA), Kingdomware decided to sue when the rulings did not have the impact they were hoping for under the 2006 law.

Moreover, Kingdomware argues that the VA contracting officer violated the “Rule of Two,” as outlined in 15 U.S.C. § 657f, which states that the contracting officer cannot award a contract outside of a VOSB if no fewer than two small business submitted proposals. It would be considered in violation of this well-known rule throughout government in connection with awarding contracts restricted to small businesses.

     

In early 2012, The VA decided that they were going to implement an Emergency Notification Service, and the VA contracting officer chose to use the GSA FSS to procure the needed services. This particular vendor was not a VOSB. The VA argues under this law, they are not obligated to choose only VOSB and that the decision to choose the vendor that they did falls under the discretion of the Secretary of the VA.

DECISION

The Court of Federal Claims granted summary judgement without deference. They concluded that Kingdomware’s interpretation of § 8127(d) did not account for the Secretary’s mandatory authority to set the goals for the contracts; therefore, it is an unreasonable assumption that the VA is required to always give a VOSB the right of way and choose them as the contracted entity.

Additionally, the Court ruled that there is no reason to compel the Secretary to set aside any contract for the “Rule of Two” inquiry before using the FSS, as Kingdomware had requested. The court stated that the VA has consistently met its mandatory goals for procurement of SDVOSBs each year since the Veterans act of 2006 went into effect. Furthermore, the Secretary and his officer (“the contracting officer”) had the right to award the contract as they saw fit, as long as they were meeting the goals and mandates set forth. The Department of Veterans Affairs decision was not arbitrary and they did not act contrary to the law.

SCOTUS APPEAL

The Kingdomware case was set to be heard at the Supreme Court of the United States on Monday, November 9th, 2015, but it was pulled from the calendar. The Court issued an order to both parties asking whether the disputed contracts in the case “have been fully performed, and if so, whether the case is moot.” The briefs are to be filed with the Clerk of the Court no later than Friday, November 20th, 2015. After reviewing these briefs, the court will then decide if the controversy of the case is still live. At this time it is unclear, if the case remains alive, when it would return to the calendar. It is most unusual that the Court decides to remove a case from the calendar once it is set, unless the circumstances in question have found a way to be resolved prior to that date.