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Topic: Misappropriation

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	The Doctrine of Misappropriation (Site not responding. Last check: 2007-10-30)
		Misappropriation is one of the bodies of law to which litigants struggling over perceived misuses of the Internet are turning for guidance.
		The Supreme Court granted the relief AP was seeking, and the misappropriation doctrine was born.
		An important point argued in the case was that any misappropriation claim was preempted by the federal Copyright Act; in essence, that the NBA was trying to use misappropriation to protect uncopyrightable facts.
	cyber.law.harvard.edu /metaschool/fisher/linking/doctrine (1597 words)

	Frequently Asked Questions
		If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may award reasonable attorney's fees to the prevailing party.
		This title does apply to the part of the misappropriation occurring on or after that date unless the appropriation was not a misappropriation under the law in effect before the operative date of this title.
		"Misappropriation" can include the use or disclosure of information by one who received information innocently but who subsequently learns that the information was a trade secret and had been communicated to him or her by mistake or by someone who had acquired the information improperly.
	www.calbar.ca.gov /state/calbar/calbar_generic_pr.jsp?cid=11474&id=7984&com.broadvision.session.new=Yes (3381 words)

	United States v. O'Hagan, 117 S.Ct. 2199, 138 L.Ed.2d 724 (1997). (Site not responding. Last check: 2007-10-30)
		The misappropriation of funds used for a securities transaction is not covered by its theory, the Government explains, because "the proceeds would have value to the malefactor apart from their use in a securities transaction, and the fraud would be complete as soon as the money was obtained." Brief for United States 24, n.
		Once the Government's construction of the misappropriation theory is accurately described and accepted--along with its implied construction of §10(b)'s "in connection with" language--that theory should no longer cover cases, such as this one, involving fraud on the source of information where the source has no connection with the other participant in a securities transaction.
		The absence of a coherent and consistent misappropriation theory and, by necessary implication, a coherent and consistent application of the statutory "use or employ, in connection with" language, is particularly problematic in the context of this case.
	supct.law.cornell.edu /supct/html/96-842.ZX1.html (6140 words)

	AN ECONOMIC INTERPRETATION OF THE MISAPPROPRIATION DOCTRINE: COMMON LAW
		Specifically discussed are the criticisms that a tort of misappropriation would (1) create inefficiencies in the dissemination and use of technology, (2) grant the inventor an unlimited monopoly in the new product or service, (3) impede social progress by restricting the flow of information and ideas, and (4) be pre-empted by federal statutory schemes.
		The third element of a prima facie claim for misappropriation is use by the defendant of the appropriated intellectual property in competition with the original inventor.
		In construing this second part of the test, some Courts have compared the elements of state misappropriation actions to the elements of federal copyright infringement actions: where the state claim requires an element not found in the federal copyright claim, the state claim is not preempted.
	www.law.berkeley.edu /journals/btlj/articles/vol2/paepke.html (16201 words)

	[No title] (Site not responding. Last check: 2007-10-30)
		The Court validated the use of the misappropriation theory to prosecute insider trading, and also held that Rule 14e-3, as applied to the particular facts of the case, did not exceed the rulemaking authority of the SEC.
		The misappropriation supplies the "deceptive" conduct required by Section 10(b); in addition, the misappropriation must be causally connected to the securities transaction, thus satisfying the "in connection with" requirement of Section 10(b).
		Under the Court's reasoning, the crux of the misappropriation theory is that the misappropriator has deceptively failed to disclose the misappropriation to the source of the information; without this failure to disclose, there is no "deceptive device," and no violation of Section 10(b).
	www.weil.com /wgm/cwgmpubs.nsf/475bf0f96efe96638525679b0053248d/127bfd28adada9e0852567990078698a?OpenDocument (3529 words)

	Supreme Court Turns Insider Trading Inside Out
		The misappropriation theory subjects individuals who trade on material, non-public information to prosecution, regardless of whether they worked for the company whose stock was being traded or otherwise owed the corporation's shareholders a fiduciary duty.
		Concluding that the language of the misappropriation theory was consistent with the language of 10(b), the Supreme Court upheld the validity of the misappropriation theory in criminal as well as civil insider trading cases.
		As refined in O'Hagan, under the misappropriation theory an individual violates 10(b) and Rule 10b-5 when he or she obtains material, confidential information, and then uses it in a subsequent securities transaction in breach of a fiduciary duty or similar relationship of confidence owed to the source of the information.
	www.criminaljustice.org /CHAMPION/ARTICLES/97dec04.htm (3679 words)

	ARTICLE 74 - Trade Secrets - Business Law Section - Colorado Bar Association
		In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret.
		7‑74‑104 (2) If the misappropriation is attended by circumstances of fraud, malice, or a willful and wanton disregard of the injured party's right and feelings, the court or the jury may award exemplary damages in an amount not exceeding the award made under subsection (1) of this section.
		An action for misappropriation of a trade secret shall be brought within three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.
	www.cobar.org /group/display.cfm?GenID=3666 (784 words)

	Volume V, Issue 2, Winter 1998
		In holding that state misappropriation doctrine is preempted by the Copyright Act except in a very narrow class of "hot news" cases,[2] NBA unduly restricts the common law's ability to prevent tortious behavior between database industry competitors.
		Misappropriation doctrine can be utilized to specifically address the problems faced by database producers because it is applied only in the context of specific cases.
		As applied to misappropriation doctrine, it could accordingly be argued that because misappropriation doctrine would often protect facts, and because the Copyright Act commits facts to the public domain, enforcement of misappropriation doctrine would in many cases conflict with the Federal purpose of reserving facts to the public domain.
	law.richmond.edu /jolt/v5i2/djava.html (10610 words)

	Uniform Trade Secret Act [NYS-STLC]
		In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret.
		If (i) a claim of misappropriation is made in bad faith, (ii) a motion to terminate an injunction is made or resisted in bad faith, or (iii) willful and malicious misappropriation exists, the court may award reasonable attorney's fees to the prevailing party.
		An action for misappropriation must be brought within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.
	nys-stlc.syr.edu /lawlibrary/tradesecret/utsa.aspx (627 words)

	SENATE BILL 1319 P.N. 1780 (Site not responding. Last check: 2007-10-30)
		Damages can include both the 15 actual loss caused by misappropriation and the unjust enrichment 16 caused by misappropriation that is not taken into account in 17 computing actual loss.
		In lieu of damages measured by any other 18 methods, the damages caused by misappropriation may be measured 19 by imposition of liability for a reasonable royalty for a 20 misappropriator's unauthorized disclosure or use of a trade 21 secret.
		This act shall not apply to misappropriation 4 occurring prior to the effective date of this act, including a 5 continuing misappropriation that began prior to the effective 6 date of this act and which continues to occur after the 7 effective date of this act.
	www.legis.state.pa.us /WU01/LI/BI/BT/2001/0/SB1319P1780.HTM (735 words)

	U.S. Copyright Office - Database and Collections of Information Misappropriation Act of 2003 (Site not responding. Last check: 2007-10-30)
		That case involved a state law misappropriation claim by the NBA against the maker of a hand-held pager which provided subscribers with scores and statistics of professional basketball games in progress.
		The first condition is codified in subsection 3(a)(1) of the discussion draft, which applies the prohibition against misappropriation only to databases that were “generated, gathered, or maintained through a substantial expenditure of financial resources or time.” The term “maintained” does not appear in the court's articulation of the first condition.
		Its focus is on unfair competition through the misappropriation of a commercial product that is the result of substantial expenditure of another's financial resources or time, in a way that inflicts commercial injury on that person, elements that are far removed from the core of copyright.
	www.copyright.gov /docs/regstat092303.html (3451 words)

	O'Hagan (Site not responding. Last check: 2007-10-30)
		The misappropriation theory is thus designed to protect the integrity of the securities markets against abuses by outsiders to a corporation who have access to confidential information that will affect the corporation's security price when revealed, but who owe no fiduciary or other duty to that corporation's shareholders.
		This is the extent of the misappropriation theory adopted in O'Hagan.
		Thus, the Supreme Court must have adopted the misappropriation theory in reliance upon the operation of state common law to define the "breach of fiduciary duty" that is the linchpin of the misappropriation theory.
	classes.washburnlaw.edu /rami/Publications/ohagan.htm (15150 words)

	HOUSE BILL 696 P.N. 769 (Site not responding. Last check: 2007-10-30)
		Damages can include both the 16 actual loss caused by misappropriation and the unjust enrichment 17 caused by misappropriation that is not taken into account in 18 computing actual loss.
		In lieu of damages measured by any other 19 methods, the damages caused by misappropriation may be measured 20 by imposition of liability for a reasonable royalty for a 21 misappropriator's unauthorized disclosure or use of a trade 22 secret.
		This act shall not apply to misappropriation 5 occurring prior to the effective date of this act, including a 6 continuing misappropriation that began prior to the effective 7 date of this act and which continues to occur after the 8 effective date of this act.
	www.legis.state.pa.us /WU01/LI/BI/BT/2001/0/HB0696P0769.HTM (762 words)

	Idea Misappropriation
		Idea misappropriation is a court created concept that will allow an author who pitches an idea or story to bring a claim for relief if their idea is appropriated or used without permission.
		The required elements of proof for an idea misappropriation case are; (1) is the story idea original; (2) did the author actually submit the idea (oral or written); (3) was the idea understood to be for sale; (4) was the idea misappropriated; (5) are the any actual damages.
		Idea misappropriation cases are expensive so the author should be relatively sure that he/she could meet the required elements of proof in their jurisdiction.
	www.aalbc.com /writers/idea.htm (879 words)

	Undisclosed Information (Uniform Trade Secret), Act, 1985 (Site not responding. Last check: 2007-10-30)
		Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.
		An action for misappropriation must be brought within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.
		With respect to a continuing misappropriation that began prior to the effective date, the [Act] also does not apply to the continuing misappropriation that occurs after the effective date.
	www.wipo.int /clea/docs_new/en/us/us034en.html (923 words)

	Harris Beach \| News & Events \| Articles
		In New York, the misappropriation branch of unfair competition was once described as a broad and flexible doctrine encompassing any form of commercial immorality or simply as endeavoring to reap where one has not sown.
		The cause of action is based on the taking of the skill, expenditures and labors of a competitor and misappropriating, for the commercial advantage of one person, the benefit or property right belonging to the other.
		It concluded that it would seem illogical for the claim to be predicated on misappropriation of tangible property, which by definition could not be used by both parties simultaneously.
	www.harrisbeach.com /news/articleviewer.cfm?aid=56 (1350 words)

	Intellectual Property Professional Information Center: Trade Secret Claim Arises Only With Initial Misappropriation
		Although the UTSA does not define "continuing misappropriation," Judge Moreno conceded, it is evident from the definition of "misappropriation" that it means the continuing use or disclosure of a trade secret after that secret was acquired by improper means.
		The court conceded that a "misappropriation" within the meaning of the UTSA occurs not only at the time of the initial acquisition of the trade secret by wrongful means, but also with each misuse or wrongful disclosure of the secret.
		We conclude that a plaintiff's claim for misappropriation of a trade secret against a defendant arises only once, when the trade secret is initially misappropriated, and each subsequent use or disclosure of the secret augments the initial claim rather than arises as a separate claim.
	ipcenter.bna.com /pic2/ip.nsf/id/BNAP-5GCTYV?OpenDocument (1277 words)

	The NATIONAL BASKETBALL ASSOCIATION and NBA Properties, Inc
		The district court concluded that the NBA's misappropriation claim was not preempted because, with respect to the underlying games, as opposed to the broadcasts, the subject matter requirement was not met.
		We do find that a properly-narrowed INS "hot-news" misappropriation claim survives preemption because it fails the general scope requirement, but that the broader theory of the radio broadcast cases relied upon by the district court were preempted when Congress extended copyright protection to simultaneously-recorded broadcasts.
		FII, 808 F.2d at 209 (" 'misappropriation' of 'hot' news, under International News Service, [is] a branch of the unfair competition doctrine not preempted by the Copyright Act according to the House Report" (citation omitted)).
	www.law.pitt.edu /madison/copyright/supplement/nba_v_motorola.htm (5610 words)

	NATIONAL BASKETBALL ASSOC. v. MOTOROLA, INC., 105 F.3d 841 (2nd Cir. 1997) (Site not responding. Last check: 2007-10-30)
		The district court reached this conclusion by holding: (i) that the NBA's misappropriation claim relating to the underlying games was not preempted by Section 301 of the Copyright Act; and (ii) that, under New York common law, defendants had engaged in unlawful misappropriation.
		We hold that where the challenged copying or misappropriation relates in part to the copyrighted broadcasts of the games, the subject matter requirement is met as to both the broadcasts and the games.
		[58] "Misappropriation" is not necessarily synonymous with copyright infringement, and thus a cause of action labeled as "misappropriation" is not preempted if it is in fact based neither on a right within the general scope of copyright as specified by section 106 nor on a right equivalent thereto.
	www.law.cornell.edu /copyright/cases/105_F3d_841.htm (6977 words)

	Insurance for "Advertising Injury Liability" Provides Coverage
		it is equally reasonable, for example, to ascribe to the term misappropriation the more general meaning of "to take wrongfully" as it is to limit it to its technical common law sense.
		Similarly, while the misappropriation of an "advertising idea" certainly would include the theft of an advertising plan from its creator without payment, it is also reasonable to apply it to wrongful taking of the manner or means by which another advertises its goods or services.
		The court found that "misappropriation" cannot be read to include trademark infringement yet (perhaps implicitly noting the difficulty with its position) also held that the term "does not necessarily refer only to the common-law tort of misappropriation." 99 F.3d at 802.
	www.poynerspruill.com /infocenter/Litigation_Appellate/advinj.asp (3268 words)

	bm41a
		It differs from robbery or theft in that the misappropriated item is taken with the intent to use part of it, but not to steal all of it.
		Misappropriation by a paid custodian need not have been mentioned explicitly; we could have derived it logically from misappropriation by an unpaid custodian.
		An unpaid custodian who is not liable for loss or theft is liable for [unavoidable damage after misappropriation], even more so that a paid custodian who _is_ liable for loss or theft [would be liable for unavoidable damage after misappropriation].
	userpages.umbc.edu /~shimoff/bm41a.htm (1166 words)

	The Trade Secrets Homepage - THIRD PARTY LIABILITY FOR TRADE SECRET MISAPPROPRIATION
		A variety of third parties can get caught in the "web" of trade secret misappropriation if such persons knew or had reason to know that they are the recipients of unauthorized trade secret information.
		Third-party liability for trade secret misappropriation is a critical component of trade secret law because often third parties are the only ones with "deep pockets'" for the recovery of damages for trade secret violations.
		Assuming the existence of a protectable trade secret, Company A has a cause of action for trade secret misappropriation if Person X knew or had reason to know that the trade secret was acquired by Person X from a person (the ex-employee) who had a duty to maintain its secrecy.
	my.execpc.com /~mhallign/3party.html (555 words)

	The Cutting Edge of Trade Secrets--How Far Should the Law Go To Prevent Misappropriation by Memory and Inevitable ...
		"misappropriation by memory"; and second, whether an employer can use trade secret law to enjoin a former employee from working in a job that would inevitably result in the use of trade secrets, i.e.
		Finally, though a valuable trade secret may be more tempting to misappropriate, there is no good reason to deny protection to a trade secret that has a lesser value, or a lesser value to the former employer than to the new employer.
		Both the USTA and the Restatement expressly permit courts to enjoin threatened misappropriation, which is often important for employers to prevent former employees and competitors from wrongfully using a trade secret before such misappropriation occurs.
	library.findlaw.com /2002/Dec/12/132434.html (5230 words)

	Workers should consider consequences
		Furthermore, willful or malicious misappropriation may result in a Court award of exemplary damages not to exceed twice the total of both actual damages and any unjust enrichment, plus the possibility of attorney's fees.
		In summary, both federal and state law recognizes trade secret misappropriation is a very serious matter, and therefore, provide substantial penalties for the culprit and remedies for the victim.
		Individuals considering trade secret misappropriation, whether of their employer's competitor or of a current or former employer, would be well advised to consider the potential dire civil and criminal consequences of their actions.
	www.hamker.com /practice_areas/emplaw/workersconsiderconseq.html (552 words)

	For The Record
		Conflict of interest is defined as any transaction between the university and a business entity in which an employee or his/her family members have a substantial financial interest (5% or more), or any transaction in which an employee cannot be reasonably expected to exercise independence of judgment.
		No department or individual should investigate a misappropriation on their own, or enter into any kind of discussion regarding settlement or restitution.
		Restitution from the person(s) committing the misappropriation will be pursued, either on a voluntary basis or as the result of criminal prosecution.
	www.usc.edu /uscnews/stories/1034.html (759 words)

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