USA – ILLINOIS Trends and Developments Contributed by: Steven P Blonder, Much Shelist
mula for Coca-Cola, Google’s search algorithm, and the secret sauce recipe of McDonald’s. None of these examples enjoy patent, copy- right or trade mark protection – rather, each is a protected trade secret. A trade secret enjoys significant advantages over the other forms of IP protection in that disclosure is not required and the “secret” can be protected for an unlim- ited period. Although many of the big IP litigation battles historically involved patent challenges, that is no longer the case. Many well-known companies are or have been involved in costly trade secret litigation in recent years. This litigation in the trade secret space cut across a wide swathe of industries, ranging from cannabis to fashion and retail, e-commerce and consumer products. Historically, trade secret claims had been brought in state courts, but now ‒ following the 2016 passage of the federal Defend Trade Secrets Act (DTSA), which created a federal cause of action for trade secret theft ‒ claims are routinely brought in the federal courts. On the recovery side, courts have continued to award successful plaintiffs substantial damages in trade secret cases. Although most claims are resolved prior to trial, the past five years have seen federal court trade secret claims result in large jury verdicts. If nothing else, recent years serve as a stark reminder that the damages that are being awarded for trade secret claims remain staggering. ESG and Shareholder Lawsuits Many businesses, both public and private, have embarked on ESG initiatives in recent years. Some of these plans were large and audacious, whereas others were more modest in scope. Either way, even though companies have tra- versed through increasing scrutiny from con- sumers, investors and government agencies in
terms of ESG issues, the risk of litigation related to these efforts has never been higher. Much of this new ESG litigation has been filed in courts located in Washington, DC. The past year has seen an increase in claims over corporate responsibility regarding ESG agendas. Most of this litigation is brought by private litigants or by government agencies intent on pushing back against ESG initiatives. And there are no signs of that changing any time soon. New claims are targeting companies for activi- ties taking place within their supply chains. By way of example, in February 2024, Starbucks was sued for advertising its products as “ethi- cal” while at the same time sourcing its prod- ucts (including coffee) from farms where labour abuses are reportedly taking place. Likewise, Mondelez (the maker of Oreos) was accused of misleading consumers by claiming that its production practices are “100% sustainable”. These types of lawsuits are not new but are increasing in number. The rise in these types of suits resulted from increased awareness and heightened scrutiny surrounding ESG issues, non-profit organisa- tions using local consumer protection laws (eg, in Washington, DC) that afford standing to sue, and increased litigation funding that has made the costs of such litigation more palatable on the plaintiff side. Companies are also being challenged over their ESG initiatives as a whole. As a result, compa- nies may be taking a new approach to laying out their environmental goals ‒ namely, they are not doing so, demonstrating an increasing trend towards “greenhushing” (or being radio silent regarding their approach to environmental
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