Federal Court Dismisses CFAA Claims Against Former Executive, Allows CFAA and DTSA Claims Against Competitor in Pharmaceuticals Trade Secret Dispute - Lexology
April 18 2018 rbbm
"A recent decision from the Eastern District of Pennsylvania reinforces the importance of the timing of purported misconduct in alleged violations of the Computer Fraud and Abuse Act (CFAA) and Defend Trade Secrets Act (DTSA). In
Teva Pharmaceutical USA, Inc. v. Sandhu, et al., 2018 WL 617991 (Jan. 30, 2018), Judge Savage found that a defendant former executive could not be liable under the CFAA for conduct that occurred while she had authorized access to computers from which she misappropriated trade secrets.
Id. at *1. However, the court also found that CFAA claims could be brought against the recipients of those trade secrets under an “indirect access” theory, and that DTSA claims could be brought on the basis of activity that began
before the enactment of the DTSA but continued to occur after its passage.
Teva Pharmaceuticals, the largest generic drug manufacturer in the world, employed Barinder Sandhu as its Senior Director of Regulatory Affairs from 2012 to 2016.
Id. In that role, Sandhu was responsible for overseeing Teva’s post-approval regulatory affairs for its generic products in the United States. As part of her employment, Sandhu entered into a confidentiality agreement and was allegedly given extensive access to Teva’s trade secrets, including confidential information about products still in development and correspondence from the Food & Drug Administration detailing how Teva might obtain approval for other products in development.
Id.
Teva alleges that during her employment, Sandhu was romantically involved with Jeremy Desai, the CEO of Apotex, a competing manufacturer of generic pharmaceuticals. According to Teva, it received a tip from a former Apotex employee that Sandhu had shared information about Teva products in development with Desai."