http://www.securedocs.com - This slideshow covers the rules and regulations you need to know so you're prepared in case of a litigation event and to protect your company from future litigation claims.

 Learn about: Preservation of electronically stored information. Data filtering, processing, and production tools. Using social media in e-discovery. Non-competes, confidentiality agreements and trade secret restrictions. OUR PRESENTER 
Rob Shlachter is a trial lawyer who emphasizes in all types of complex business litigation with a concentration on intellectual property, unfair competition and commercial litigation. From 2005-2012 Rob has been named a top litigator multiple times in The National Law Journal, Chambers USA: America's Leading Lawyers, Best Lawyers in America, Benchmark Litigation Guide, and Oregon Super Lawyers for business, intellectual property and "bet-your-company" disputes.

 ABOUT THE HOSTS
 This educational event is co-hosted by Nexonia, a provider of web-based expense report, timesheet and customer service solutions and AppFolio SecureDocs, provider of a secure virtual data room for storing and sharing financial documents.

2. Nexonia offers easy-to-manage and cost-
effective web-based business solutions.
• Expense reports, timesheets, and customer
service solutions
• Solutions come in 161 currencies and are
offered in English, French and Spanish
• Time, expense and billing reports are available
in a pre-defined or customized format
according to specific needs

3. AppFolio SecureDocs is a virtual data room
for sharing and storing sensitive documents
with parties outside company walls.
AppFolio, Inc. Company Basics
• Founded by the team that created and launched
GoToMyPC and GoToMeeting
• Backed by leading technology companies and
investors
• Web-based business software for financial and legal
professionals

4. About Robert Shlachter
• Rob Shlachter is a trial lawyer who
handles all types of complex business
litigation with a focus on intellectual
property, unfair competition, and
commercial litigation.
• From 2005-2012, Rob has been
named a top litigator multiple times in
The National Law Journal, Chambers
USA: America’s Leading Lawyers, Best
Lawyers in America, Benchmark
Litigation Guide, and Oregon Super
Lawyers for business, intellectual
property, and “bet-your-company”
disputes.

5. Agenda
• Preservation of electronically stored information
• Data filtering, processing, and production tools
• Social media in e-discovery
• Consequences of failing to comply with e-discovery
• Non-competes, confidentiality agreements, and trade
secret restrictions

6. Preservation of Electronically-
Stored Information: Timing
• Obligation to preserve
arises when a party should
“reasonably know that
evidence may be relevant
to anticipated litigation.”
• Plaintiff should preserve
immediately. Plaintiff’s
burden may arise before
defendant’s because
plaintiff controls timing of
litigation.

7. Poll 1

8. Preservation of Electronically-Stored
Information: Best Practices
• Discuss preservation of documents with
counsel. Counsel must oversee compliance
with litigation hold and monitor efforts.
• Broadcast the need to preserve to the
appropriate people (IT staff, assistants, other
key employees, etc.)
• Under counsel’s supervision, send regular
and frequent reminders of obligation to
preserve. Use a model letter from counsel
to send to employees.
• Remember that the obligation to preserve
extends to discovery in possession or control
of third parties (possibly including
vendors, consultants, etc.)

9. Data Filtering, Processing, and
Production Tools: Electronic Evidence
• Electronic evidence can reside in a wide
variety of locations (local hard
drives, network servers, backup
tapes, etc). Understand the “lay of the
land” at the outset of the case.
• Electronic evidence can be easily altered
or lost, even by everyday computer use.
• Preserve all relevant sources of
evidence, including email
retention, rotation cycles for backups, and
re-purposing computers for new
employees.

10. Data Filtering, Processing, and
Production Tools: Data Filtering
• What is your business’s protocol for document management?
– Does everyone follow protocol? What are the auto-delete and auto-
backup policies? What are the regulatory requirements for
preservation?
• Identify key custodians
• Search terms
• Review databases
– Native, in-house, outside service

11. Poll 2

12. Data Filtering, Processing, and
Production Tools: Processing
• Employ early case assessment (“ECA”) tools
– Determine the source files to be analyzed;
– Set the parameters for assessment;
– Software automatically scans & assesses the data;
– Review the reports generated by the software.

13. Data Filtering, Processing, and
Production Tools: Production Tools
• Different applications have different
capabilities, strengths, weaknesses, etc.
• Key issues to consider:
– Process native documents/extracting metadata in a reliable and
defensible manner?
– Deduplication and grouping ‘near’ duplicates?
– Metadata and text searching/sorting?
– Concept clustering (grouping documents by topic and not just
matching words)?
– Coding and tagging databases?
– Redacting and marking for production?
– Creating privilege logs?

14. Social Media: Overview
• Social media data is generally
discoverable.
• Same duty to preserve exists.
• Social media sites
(Facebook, MySpace, Twitter, etc.)
pose unique issues for requesting and
producing parties:
– Publicly-available information vs.
information that resides with non-
parties.
– Relevancy of information to claim.
– Authenticating internet-based
information.
– Difficulties preserving information that
inherently “updates” frequently.

15. Social Media: Best Practices
• Businesses should avoid or limit the
potential for broad-reaching discovery of
individual social media pages when/if
litigation commences.
• Consider limiting or monitoring at-work
access to social media sites.
• Develop clear policies for use of social
media at work, communicate those
policies clearly, enforce them, and update
them when needed.
• Consider forming a “crisis management”
team and plan in the event of a social
media error or issue. Be ready to address
problems quickly and appropriately.

16. Poll 3

17. Consequences For Failing To Comply
With Discovery Obligations
• Spoliation is the “destruction
or significant alteration of
evidence, or the failure to
preserve property for
another’s use as evidence in
pending or reasonably
foreseeable litigation.”
Spoliation occurs if the party
had “some notice” that
documents were “potentially
relevant” to litigation before
they were destroyed.

18. Consequences For Failing To
Comply
• Electronically-stored information is especially
vulnerable to deletion, modification, or
corruption, and parties and counsel must take
extra precautions to preserve this kind of
evidence.
• Courts have an inherent authority to impose
sanctions in response to abusive litigation
practices and also may impose sanctions.

19. Consequences For Failing To
Comply
• Not all spoliation has the same consequences:
– Unintentional: Data destroyed during “routine, good faith
operation of an electronic information system” is protected
from sanctions.
– Negligent/Reckless: Allowing routine processes to continue
negligently or recklessly destroying information, overseeing
inadequately litigation hold instructions, and/or insufficiently
trying to discover relevant docs before destruction may lead to
sanctions.
– Willfulness, fault or bad faith: Deliberate spoliation or gross
failure to fulfill obligations to preserve/produce electronic data
likely will lead to sanctions and may lead to a verdict in favor of
the opposition.

20. Consequences For Failing To
Comply
• Sanction can include:
– Fees, fines, costs;
– Referral of counsel to state bar;
– Preventing the party from
presenting evidence;
– Adverse inference jury
instruction;
– Terminating the case by
dismissal or default.

21. Non-Competes: Definition
• A non-compete agreement is a contract
between an employee and
employer, generally signed at the time of
hiring or promoting, where the employee
agrees not to enter into competition with the
employer after employment is terminated for
a defined period of time.

22. Non-Competes: General
Requirements
• Must be reasonable: The contract must be designed to protect the employer’s
legitimate interests without overly restricting the employee’s ability to find a job in
the field that doesn’t compete with the employer.
• Must be made in exchange for something: In some states, a non-compete
agreement is valid only if it is signed at the beginning of employment because the
employer is giving something (a job) in exchange for the employee’s agreement. In
California, non-competes generally are not allowed.
• Must be limited in length of time: Time periods of six months to two years are
usually enforceable. Longer periods may render an agreement invalid because it
may be seen as too restrictive on the employee’s ability to find meaningful work.
• Generally, must be limited in geographic scope: An employer generally cannot bar
an employee from competing anywhere in the country or the world.

23. Non-Competes: Enforceability
• In some states, if a non-compete does not
meet one of the requirements above and is
too restrictive on the employee, a court can
change the contract and make it less
restrictive and enforce it.
– Example: A contract barring an employee
from working in her field anywhere in the
state may be changed to restrict the area to
the city where the employer is based.
• In other states, the courts cannot change
the contract. There, the contract will be
enforced as written or ignored completely.

24. Confidentiality Agreement:
Definition
• A contract in which the parties agree that
certain types of information that pass from
one party to the other or that are created
by one of the parties will remain
confidential.
• Often used when a company or individual
has a secret process or new product that it
wants another company to evaluate as a
precursor to a licensing agreement or for
use in a new and different application.
• Now routinely used in employment
agreements.

25. Confidentiality Agreement:
Purposes
• Protect sensitive technical or commercial information
from disclosure to others. If information is
revealed, the injured party has cause to claim a breach
of contract and may seek injunctive and monetary
damages.
• Prevent forfeiture of patent rights. Public disclosure of
an invention before patent application can be deemed
as forfeiture of patent rights in that invention, so a
confidentiality agreement can avoid that forfeiture.

26. Confidentiality Agreement:
Key Provisions
• Define “confidential information.” • Include limits on information deemed
The agreement should set forth as confidential. There must be some
specifically as possible the scope of limits on the type of information that
information covered. will be deemed confidential. For
example, information received by
• Explain purpose of disclosure. third parties, that becomes publicly
Confidential information is revealed known, or that is requested by order
to another party only for a specific of a government agency is not
purpose. The agreement should set considered confidential.
forth what that agreement is.
• Set a term. The term of the
• Incorporate “no disclosure” and “no agreement must be long enough to
use” provisions. The recipient must protect the interests of the disclosing
agree not to disclose the information party but not so long as to unduly
to third parties and not to use the burden the recipient.
information for any purpose other
than that set forth in the agreement.

27. Poll 4

28. Trade Secret Restrictions:
Definitions
• A trade secret is information, including a
formula, pattern, compilation, program, device, method, te
chnique, or process, that derives independent economic
value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its
disclosure or use, and is the subject of efforts that are
reasonable under circumstances to maintain its secrecy.
• State laws generally recognize that, at the termination of
employment, an employee may not take with him trade
secrets developed by his employer and disclosed to him
while the employer-employee relationship existed.
• Types of restrictions include non-competition clauses, non-
solicitation clauses, forfeiture-for-competition clauses, and
trade secrets clauses.

29. Trade Secret Restrictions:
Limitations
• The law recognizes that a business must be protected against the
wrongful appropriation of trade secrets by a former employee, but
it also recognizes the right of an individual to follow and pursue the
particular occupation for which she is best trained.
• Generally, an employee is free to take with him general skills and
knowledge acquired during his former employment.
• To prevail in court, the employer must identify specific trade secrets
which are in the former employee’s possession and which are at
risk.

30. Trade Secret Restrictions:
Best Practices
• Enter into a formal agreement with employees. Disclosing a trade secret
to an employee or licensee according to an express agreement provides
the employer broader protection than that provided by trade secret law
alone.
• Incorporate into the agreement the appropriate clauses:
– Non-competition clause (discussed above);
– Non-solicitation clause (limits the former employee from soliciting company
customers, or from convincing other company employees to join the
employee in the new venture);
– Forfeiture-for-competition clause (calls for the forfeiture of various benefits –
like stock options and bonuses – if an employee failed to abide by a non-
compete clause);
– Trade secrets clause (defines a business’s trade secrets within the employment
agreement, thereby saving time and expense in litigating the issue of what is a
trade secret).

31. Contact Information
Robert Shlachter AppFolio SecureDocs
209 SW Oak Street 50 Castilian Drive
Suite 500
Goleta, CA 93117
Portland, OR 97204
Phone: (503) 227-1600 Phone: (866) 700-7975
rshlachter@stollberne.com info@securedocs.com
sales@securedocs.com
Nexonia
Brookfield Place, TD Canada Trust Tower
161 Bay Street, 27th Floor, PO BOX 508
Toronto, Ontario
Canada M5J2S1
Phone: 1 (800) 291-4829
QUESTIONS?
help@nexonia.com

32. Thank You
Confidential ©2012 AppFolio, Inc.