Manchester v. Sivantos GmbH et al.

Trade secret misappropriation

Central District of California

U.S. District Judge Otis D. Wright II

Plaintiff's lawyers: Law Offices of Carole Handler, Carole E. Handler, Rome and Associates APC, Eugene Rome, Brianna E. Dahlberg; Dovel & Luner LLP, John Jeffrey Eichmann, Julien A. Adams, Richard E. Lyon III, Simon C. Franzini

When plaintiff Dr. Deborah M. Manchester PhD alleged that German-based hearing aid maker Sivantos GmbH and its U.S. affiliate misappropriated a tele-audiology software application she had developed, discovery disputes and document production issues followed. Alston & Bird partner Yuri Mikulka said that she and her team sought to defend Sivantos by focusing on the tension between the protection provided by patent and copyright law and that flowing from trade secret law.

Manchester had tried unsuccessfully to register a copyright for her app. "She claimed in her deposition that she no longer had the materials she had sent to the U.S. Copyright Office," Mikulka said. "We got creative and dug further." Senior associate Caleb J. Bean got credit, she said, for persisting in the search. Bean eventually hired someone to physically check the records at the copyright office, where the missing Manchester materials were located.

Michael J. Newton

Even though the case had a complicated fact pattern and the involvement of multinational companies, Mikulka was able to cut through with a summary judgment motion that presented the court with the Manchester submission and argued that the plaintiff's copyright deposits constituted a public disclosure of the alleged trade secrets, demolishing the trade secrets claim.

U. S. District Judge Otis D. Wright II of Los Angeles wrote in dismissing the case, "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." Manchester v. Sivantos GmbH, 2:17-cv-05309 (C.D. Cal., filed July 19, 2017).

Mikulka said her research showed that trade secrets cases are on the rise in California and that they account for 18.5 percent of all such cases filed in U.S. district courts nationwide. "There are so many tech companies and so much innovation here that it appears to be inevitable," she said. "Often claimants want both copyright protection and trade secret protection, but they have to choose. For us, it was so important to have a creative team that didn't give up and did not simply take the word of our opponent during discovery."

Plaintiff's counsel John Jeffrey Eichmann said his appeal resulted in a confidential settlement. Manchester is now seeking patent protection for her inventions, he added.

-- John Roemer