Trade Secrets: Law and Practice

Field: Arts and Humanities (Social Sciences)

I. WHAT IS PROTECTIBLE AS A TRADE SECRET? A. Elements of UTSA Definition 1. Meaning of 2. Meaning of Derives Value 3. Meaning of Not Generally Known 4. Meaning of B. Non-UTSA Definitions of C. Examples of Types of Information Subject to Trade Secret Protection (Advertising and marketing strategies customer databases customer information customer lists know-how negative know-how marketing information pricing policies religious materials, etc.) II. LITIGATING TRADE SECRET ACTIONS--PLAINTIFF'S PERSPECTIVE A. Alleging Trade Secret 1. Misappropriation 2. Improper Means 3. Acquisition, Use or Disclosure 4. Imputed, Vicarious, and Joint Liability B. Alleging Alternative Claims 1. Breach of Express or Implied Contract 2. Breach of Confidence 3. Breach of Fiduciary Duty 4. Breach of Duty of Loyalty 5. Conversion 6. Unfair Competition C. Requirement to Identify Trade Secrets With Reasonable Particularity 1. Federal, California and Other State Requirements 2. Side-Stepping the Reasonable Particularity Requirement D. Preliminary Injunctive Relief 1. Actual Injury 2. Inevitable vs. Threatened Injury (DISCUSS DOCTRINE OF INEVITABLE DISCLOSURE. DISCUSS WHERE INEVITABLE DISCLOSURE PROVIDES THE BASIS FOR AN ACTION AND WHEN INJURY IS REQUIRED. DESCRIBE HOW MISAPPROPRIATION IS THREATENED EVEN WHEN IT IS NOT INEVITABLE. 3. Reasons for Seeking a Temporary Restraining Order 4. Use of Expedited Discovery 5. Bond Requirement E. Proof of F. Discovery G. Damages/Unjust Enrichment/Royalty/Exemplary Damages/Fees H. Procedural Considerations 1. Jurisdiction/Venue/Defendant Considerations (DISCUSS STRATEGY CONSIDERATIONS. FOR EXAMPLE, EMPLOYEE IS HIRED IN CALIFORNIA (WHERE NON-COMPETES ARE UNENFORCEABLE) OR IN A STATE WHERE INEVITABLE DISCLOSURE DOCTRINE IS NOT RECOGNIZED, BUT EMPLOYER IS SUBJECT TO JURISDICTION IN MULTIPLE STATES. DISCUSS APPLICATION OF FULL FAITH AND CREDIT CLAUSE TO MONEY DAMAGES AWARD, INABILITY TO ENFORCE INJUNCTION DIRECTLY BUT ABILITY TO GAIN COMPLIANCE THROUGH CONTEMPT SANCTIONS WHERE ACTION WAS BROUGHT.) 2. Statute of Limitations Issues 3. Federal Jurisdiction III. LITIGATING TRADE SECRET ACTION--DEFENDANT'S PERSPECTIVE A. Pre-Emption Defenses B. Statute of Limitations C. Other Defenses D. Effect of Arbitration Provision E. Challenging the Identification of the Trade Secrets F. Deliberate Publication of Trade Secrets by the Plaintiff (PATENTS AND PATENT APPLICATIONS, COPYRIGHT REGISTRATIONS, GOVERNMENTAL DISCLOSURES, PUBLICATION IN OBSCURE JOURNALS TO CREATE PRIOR ART TO DEFEAT A RIVAL PATENT CLAIM, ADVERTISING/MARKETING, DATA RIGHTS REGULATIONS) G. Retention of Experts H. Absence of Damages as Establishing Absence of Liability IV. CORPORATE TRADE SECRET PROTECTION PLANS A. Policy Considerations/Reasonable (Why do Courts Care? No System Is Perfect) B. Identifying and Classifying Trade Secrets C. Protecting Documents D. Protecting Electronic Data E. Physical Security Measures F. Employee Agreements/Non Compete Provisions G. Protecting Trade Secrets When Contracting With the Government or Others V. DEPARTING EMPLOYEES A. Seizing Computers, Examining E Mail Messages, Preserving Evidence B. Questioning Colleagues and Subordinates C. Conducting Exit Interviews VI. CRIMINAL PROSECUTION OF TRADE SECRET MISAPPROPRIATION A. Pros and Cons of Criminal Prosecution B. Economic Espionage Act of 1996 C. State Economic Espionage Acts D. Preparing a Presentation for Prosecutors