According to the allegations of a complaint filed by Amy H. Tang, a professor of microbiology and molecular cell biology, against the Eastern Virginia Medical School (“EVMS”), EVMS misappropriated her trade secrets and discriminated against her due to her Chinese ethnicity. She sued the school for violations of both the Defend Trade Secrets Act and the Virginia Uniform Trade Secrets Act, plus a host of other claims. EVMS was successful in getting some of the claims dismissed, but the court ruled that Professor Tang had sufficiently alleged all the requisite elements of a trade secrets case to survive the school’s motion to dismiss.
Tang’s allegations were essentially as follows. EVMS employs Tang as a Professor of Cancer Biology. She had developed certain treatments related to the exploitation and use of ethylenediaminetetraacetic acid for anti-NFkB, anti-inflammatory, and antiseptic treatments, which she disclosed to EVMS in an invention disclosure. Tang claimed these treatments were entitled to trade secret protection considering she had taken measures to keep the information secret (including securing all data electronically and requiring staff to leave data locked within the lab facilities and password-protected computer systems) and that the information had independent economic value.
Shortly after providing the invention disclosure to her employer, Tang accused a Ph.D. candidate of stealing her intellectual property. Tang complained to EVMS a second time a few months later about additional misconduct by the Ph.D. candidate, but EVMS did nothing to address it. To the contrary, the school reprimanded Tang for reporting the student’s behavior, removed her from the student’s dissertation committee, and even allowed the student to publish Tang’s trade secrets as a poster for a scientific meeting. EVMS also “condoned or assisted the student in filing for patent protection,” Tang alleged.
In finding that Tang had alleged a valid, prima facie case of trade secret misappropriation, the court laid out the elements of both the Defend Trade Secrets Act (“DTSA”) and the Virginia Uniform Trade Secrets Act (“VUTSA”) (which are substantially similar in all material respects) as follows:
First, there is the matter of how to define a trade secret. Under the DTSA, a trade secret is defined as “all forms and types of …scientific…information…if — (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value…from not being generally known to…another person who can obtain economic value from the disclosure or use of the information….” (See 18 U.S.C. § 1839(3)). Similarly, VUTSA defines a trade secret as information that “(1) derives independent economic value from not being generally known, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (See Va. Code. § 59.1-336).
To allege a valid cause of action under the DTSA, the court wrote, a plaintiff must show that “(1) it owns a trade secret; (2) the trade secret was misappropriated; and (3) the trade secret implicates interstate or foreign commerce.” The requirements are the same under VUTSA, except that there is no need to implicate interstate or foreign commerce. This leaves the definition of “misappropriation.”
To establish the misappropriation element under the DTSA, the court held, Professor Tang needed to show the following:
(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(B) disclosure or use of a trade secret of another without express or implied consent by a person who—
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was—
(I) derived from or through a person who had used improper means to acquire the trade secret;
(II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or
(III) derived from or through a person who had owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret….
(See 18 U.S.C. §1839(5)).
Under VUTSA, noted the court, misappropriation consists of:
1. Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
2. Disclosure or use of a trade secret of another without express or implied consent by a person who
a. Used improper means to acquire knowledge of the trade secret; or
b. At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was
(1) Derived from or through a person who had utilized improper means to acquire it;
(2) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use;
(3) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use….
(See Va. Code § 59.1-336). As you can see, the differences are not significant.
The court found that under either the DTSA or the VUTSA, Professor Tang had alleged sufficient facts to bring a trade-secrets claim. She alleged that the medical school protected a Ph.D. student who stole her intellectual property when the student had a duty to maintain the secrecy and/or limit the use of her trade secrets. She claimed that despite EVMS’s duty to maintain the secrecy and/or limit the use of her trade secrets, EVMS allowed the student to publish Tang’s trade secrets as a poster for a scientific meeting and allegedly assisted or allowed the student to file for patent protection. Tang will eventually need to prove the truth of these allegations to prevail, but for purposes of getting past EVMS’s motion to dismiss, her allegations were deemed sufficient.