Trade Secret Identification: The Importance of Deciphering What Your Client Allegedly Stole

For the Defense

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Defense counsel have tools to draw from throughout the course of litigation to ascertain precisely what the allegedly stolen trade secrets at issue are, which will avoid surprises down the road.

Trade secrets are, by definition, “secret.” Both the Uniform Trade Secrets Act (UTSA) and the federal Defend Trade Secrets Act of 2016 (DTSA) define a trade secret as information that “derives… value… from not being generally known.” See, e.g., 18 U.S.C. § 1839(3). Moreover, to be entitled to protection, the owner of the trade secret must take “reasonable measures to keep such information secret.” See id. Indeed, “public disclosure [of the trade secret] dispels the secret.” See Servo Corp. of Am. v. General Elec. Co., 393 F.2d 551, 555–56 (4th Cir. 1968). Therefore, if a trade secret plaintiff “discloses his trade secret to others who are under no obligation to protect the confidentiality of the information, or otherwise publicly discloses the secret, his property right is extinguished.” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984).

At the same time, court proceedings and judicial documents are, by the Constitution, generally open to the public. See, e.g., Nixon v. Warner Communications, Inc.,435 U.S. 589 (1978). Courts typically will not seal a document or close a court proceeding except based on a showing that the need for confidentiality outweighs the public’s right to access. See, e.g., Ashcraft v. Conoco, Inc., 218 F.3d 288, 302 (4th Cir. 2000). Moreover, during discovery, the parties are entitled to “obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.” Fed. R. Civ. P. 26(b)(1). In a trade secret case, this would of course include disclosure of the plaintiff’s alleged trade secrets.

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Republished with permission. The complete article first appeared in the July 2018 issue of For the Defense.