1. Mediating Trade Secret Disputes:
A Mediator’s Perspective
Erica Bristol, Esq.
IP Mediator
Principal, EB Resource Group
© 2016 EB Resource Group. All Rights Reserved.

2. Disclaimer
This presentation does not constitute legal advice. Please seek the
advise of an appropriate professional for a particular situation.

3. Background
• Increase in trade secret litigation
• 2003: 791
• 2013: 2,078
• Various Forms
• Civil Litigation
• Criminal Cases
• Industrial Espionage (national and international)
• Federal Trade Secret Misappropriation (criminal)
• Employee Theft/Competition

4. Common Issues in Trade Secret Disputes
• Definition of “Trade Secret” (more on this later)
• Each Party’s Perception
• Plaintiff: theft occurred
• Defendant: fishing expedition
• Allegation of “Theft”
• Distrust, Suspicion, Anger
• Taking Things Personally
• Heated Emotions
• Lack of Cooperation
• Communication Issues

5. Sources of the Problem
• Transitory Nature of Employment
• Rapidly Evolving Technology
• Increasing Use of Trade Secret Litigation to
Protect IP
• Conflicting Non-Competition Statutes
• CA: B&P 16600 (limits on non-competition)
• Other States: limitations on geography, scope, time

6. Definition of “Trade Secret”
•Federal Law
•State Law
•Common Law
•International Law
•Case Law (interpretation, exceptions)

7. Federal Law
Economic Espionage Act of 1996
Theft of Trade Secrets
• Criminal acts
• Civil injunction by AG
Defend Trade Secrets Act of 2016 (“DTSA”)
• Private civil action
• Passed House and Senate, on its way to President’s
Desk
• “Trade Secret”: 18 U.S.C. 1839

8. State Law
•Uniform Trade Secrets Act (UTSA)
•48 states excl. MA, NY
•California: Civ. Code 3426(1)(d)

9. Non-UTSA State Trade Secret Laws
• New York: Restatement (2nd) on Torts, Section
757 (common law)
• But, note S03770 (Sanders) (2016)
• Massachusetts: Regulation of Trade and
Enterprises (ALM GL ch. 93, §§ 42 and 42A (2011)
• But, note H.32 (2016)

10. International Law
• United Kingdom: based on contract, common law (breach of
confidence)
• Non-disclosure, employment agreements, memos of understanding
• TRIPS
• European Union
• WIPO

11. Communicating with Outside Counsel
• Key factor in settlement
• Timely response to communications
• Avoid rude, disrespectful responses
• Cultural Differences
• Time Zones
• Convey professionalism, courtesy, respect
• Agree up front on communication methods if needed
• Who should attend/lead mediation (personality)

12. Developing Trust and Cooperation
• Parties agree to act in “good faith”
• No hiding the ball
• No fishing expedition
• Sometimes trust isn’t possible; work around it
• Agree to disagree

13. Conducting Adequate Discovery and
Investigation the First Time Around
• Inexperienced Counsel: seek advice of trade secret
counsel/consultant
• Make sure EEs/ICs properly instructed for discovery, investigation
• Know what to look for, where to look
• Incomplete/faulty investigation leads to distrust
• Increased time, expense, frustration

14. Use of Expert Witnesses and Reports
• Forensic Computer Expert Witnesses and Reports-Uggh!
• Simplified are Best
• Clear and Easy to Understand
• Layperson’s terms, not industry speak
• Expert available if nec. to explain legends, graphs, results
• Maximizes time spent on settlement, not review/explanation

15. Knowing When to “Stop”
• Investigation Costs
• Experts
• Time and Expense of Litigation
• Resources Involved
• Emotions (impede ability to think clearly and negotiate)
• Toll on Parties, Counsel
• Reliability/Availability of Witnesses
• Manner of systems/software configuration
• May not be possible to get the “full picture”
• Diminishing returns to continue
• Consider Best Interests of Client

16. Know Remedies and How to Calculate
Damages-Plaintiffs
• Know State/Federal Damages Law
• Lost Profits
• Unjust Enrichment
• Compensatory Damages
• Breach of contract damages
• Punitive Damages
• Injunction, Destruction of Goods
• Prejudgment Interest
• Attorney’s Fees
• Remember preemption of certain common law claims
• Don’t threat what you can’t get

17. Know Remedies and How to Avoid/Reduce
Damages-Defendants
• Must Know State/Federal Substantive Law for Damages
• “It’s Not a Trade Secret”
• Plaintiff Has Not Met Burden of Proof
• No Causation
• Limit Accounting Period
• Unclean Hands
• Lost Profits and Unjust Enrichment
• Impermissible double recovery
• Compensatory Damages
• Punitive Damages
• Prejudgment Interest
• Attorney’s Fees

18. Damages Can Set the Tone of the Mediation
Session
• “The Money is Often the Thing”
• Be Prepared for a Damages Discussion
• What a party can/can’t get, and proof
• Know Strengths and Weaknesses
• Discuss Issues with the Mediator

19. Counsel Can Impede Settlement Negotiations
Pre-mediation attitude, assumptions
Pushing Buttons
Lack of Timely Communication
Taking Things Personally
Personal issues with opposing counsel cloud judgment, ability to
negotiate
Affects Ability to Consider Best Interests of Client
Take A Break When Needed
Relax
Eat
Remember Goals of Mediation

20. Use A Mediator Experienced In Trade Secret
Disputes
• Understands nuances of “trade secret” definitions
• Acts as the “referee”
• Handles emotional issues
• Manages distrust, anger, suspicion
• Handles damages discussion
• Handles disruptive behavior by parties and counsel
• Helps parties stay on course, goal-focused

21. Takeaways for Successful Trade Secret
Mediations
• Discuss Goals with Client Prior to Mediation
• Know Definition of “Trade Secret” in Relevant Jurisdiction
• Know how to Calculate Damages
• Communicate in Timely, Professional Manner
• Don’t Push Buttons
• Know when to “Stop” Investigating
• Provide Simple Expert Reports in Layperson’s Terms
• Agree to Disagree
• Keep Best Interests of Client in Mind
• Handle Your Emotions, Have Client Try to Do the Same

22. Questions?

23. Thank You!
• EB Resource Group
• 16133 Ventura Boulevard, 7th Floor
• Encino, CA 91436
• (818) 753-2326
• ericab@ebresourcegroup.com
• Intellectual Property Mediation Services