United States: Technology Litigation Trends

Litigation for the technology industry has long been mistakenly thought of as synonymous with intellectual property litigation. High-profile patent and other intellectual property disputes between smartphone design companies and manufacturing companies continue to garner the most media attention. But today, litigation for the technology industry means a lot more than simple intellectual property disputes.

Increasingly, technology companies' litigation concerns involve governmental investigations and regulatory actions just as much as they involve commercial litigation. Disputes have grown increasingly international in scope and can involve actions in several jurisdictions around the world, raising a host of new concerns for general counsel and outside attorneys serving technology companies. Furthermore, technology companies are facing new legal challenges in new venues brought by different actors.

The trends to watch for in 2013 include high-profile issues such as data privacy and data security — two topics often on the minds of security-conscious consumers, regulators, and technology companies themselves. Other trends include litigation-specific legal issues that bear particular importance for the technology industry, such as the availability of lost-profit damages for smaller and newer companies.

We have placed a "spotlight" on these issues, but they are hardly the only trends facing technology companies in 2013. The overall technology trends to watch for in 2013 include the following:

  1. Data Security and Privacy

    The rise in cloud computing means more and more personal data and commercially sensitive information is being stored remotely in aggregated data centers. And increasing computing power has made data encryption cracking and other forms of "hacking" more powerful.

    Since 2005, an estimated 2,800 data breaches have occurred in the United States, with 4% of those breaches leading to federal litigation,1 although most of those suits were either settled early or dismissed due to the plaintiffs' inability to prove damages (plaintiffs generally must show that the security breach caused them actual harm and not just emotional distress). The risks do not stop at litigation, however. Security breaches threaten not only consumer information but also a technology company's crown jewel — its intellectual property.

    Well-designed internal controls, security breach policies, and consumer agreements can help companies mitigate these risks. However, for those cases where the breach has caused serious harm to either the company or its consumers, litigation is often necessary.
  2. Governmental Investigations

    The percentage of companies' litigation budgets spent on governmental investigations has been steadily increasing over the last several years, and technology companies are no different. In particular, laws aimed at penalizing alleged cases of bribery, such as the U.S. Foreign Corrupt Practices Act (FCPA) and the UK's new 2010 Anti-Bribery Law, have caused companies to spend tens to hundreds of millions of dollars investigating potential cases of corruption and paying fines of up to $800 million.
  3. Counterfeit Electronics

    Consumer electronics are now the most pirated category of goods in the world (replacing shoes), according to the U.S. Department of Homeland Security. Pirated products include not only knockoffs but also recycled or refurbished originals or substandard parts, made by authorized manufacturers, that were supposed to have been destroyed but instead were sold into the marketplace.

    Counterfeit goods not only harm a company's ability to protect its brand, but they can also erode sales and create potential liabilities if inadvertently incorporated into a company's final products. Companies can protect themselves by being vigilant about their marks, prosecuting infringers and suppliers who attempt to pass off counterfeit goods, and instituting internal controls to protect against the inadvertent incorporation of counterfeit components.
  4. Design Patents, Copyrights, and Trade Dress

    Intellectual property remains the lifeblood of technology companies, and, as recent cases pursued by smartphone powerhouses confirm, companies are increasingly relying on design patents, copyrights, and trade dress claims to protect their intellectual property. The recent high-profile success of claims based on design patents and trade dress demonstrates that juries still do not like what they perceive as "copying," where such claims survive the Markman process and other pretrial proceedings. Consequently, intellectual property litigation is expected to continue to grow.
  5. Employment Contracts and Trade Secret Misappropriation

    With a hot technology sector and an improving economy all around, workforce mobility has been on the rise in Silicon Valley, along with efforts by companies to acquire premium talent from competitors. New words like "acqui-hire" have even been invented to describe start-up acquisitions by larger companies that target a start-up's employees, rather than its businesses.

    Workforce mobility in the technology sector, however, can lead to legal disputes involving claims of intellectual property misappropriation, breaches of employment contracts, interference with employment contracts, and other similar claims. Companies can protect themselves and their intellectual property with appropriate employee agreements and hiring procedures and by pursuing claims where necessary and appropriate.
  6. Continued Internationalization of Technology Litigation

    Large-scale litigation between technology companies has become increasingly internationalized, with disputes between companies frequently being litigated in distant forums. This often has led to litigation on multiple fronts, with conflicting results from jurisdiction to jurisdiction. These international matters include not only the high-profile smartphone patent lawsuits taking place in Germany, the United States, and Asia, but also one-off matters. Technology companies require worldwide representation and must be prepared to litigate literally anywhere in the world they do business.


1. Sasha Romanosky, David A. Hoffman & Alessandro Acquisti, Empirical Analysis of Data Breach Litigation, Temple Univ. Legal Studies Research Paper No. 2012-30 (2012), available at http://ssrn.com/abstract=1986461.

Copyright 2013. Morgan, Lewis & Bockius LLP. All Rights Reserved.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions