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Parker Poe Resolves Federal Litigation in Georgia Involving Trade Secrets Law

  • August 30, 2022

Atlanta, GA – Parker Poe Adams & Bernstein LLP is pleased to announce the firm successfully resolved federal litigation for LendSure Mortgage Corp. involving the Georgia Trade Secrets Act and the federal Defend Trade Secrets Act. The ruling in the U.S. District Court for the Northern District of Georgia helped clarify an important issue in trade secrets law: the standard a plaintiff must meet in claiming misappropriation of trade secrets.

The case involved four employees who left Angel Oak Mortgage to work for LendSure, a California-based specialty mortgage company. Angel Oak alleged that the employees – and their new employer, LendSure – stole trade secrets in violation of the Defend Trade Secrets Act, the Georgia Trade Secrets Act, and several other state laws. The claims focused on a common issue in trade secrets litigation: an employee emailing alleged trade secrets from a work account to a personal account before termination.

The federal district court granted Parker Poe’s motion to dismiss the trade secrets claims tied to emails where no claim was made that the departing employee gave those emails to the new employer or used them. The court ruled that under Georgia and federal trade secrets law, the plaintiff must state a claim beyond “moving information from one storage location to another—both controlled by the same person.” The court wrote, “You do not ‘use or apply’ a product when you move it from the attic to the basement.” Finding that the mere fact of emailing to a personal account was not theft, the court said the element of misappropriation was not properly alleged.

The ruling will help protect other Georgia businesses from trade secrets litigation based simply on email traffic, without further evidence of misappropriation. It has already been used in motions to dismiss in other trade secrets cases. (The parties in the LendSure case amicably resolved all differences shortly after the ruling.)

Parker Poe Atlanta partner David Pardue and Atlanta associate Brian Stoltz represented LendSure in the case.

About Parker Poe
Parker Poe Adams & Bernstein LLP has more than 275 lawyers in eight offices in North Carolina, South Carolina, Georgia, and Washington, DC. The firm provides legal counsel to many of the largest companies and local governments in the Southeast.

Parker Poe is a member of two leading international legal networks: TerraLex and the Employment Law Alliance. TerraLex and the ELA have chosen Parker Poe to help guide clients through the challenges of global business.