This document discusses trade secret litigation and protection. It begins by explaining that trade secret litigation involves violations of trade secret law through misappropriation or violations of non-disclosure agreements. It then outlines the process of trade secret litigation, including filing complaints, discovery, trial procedures, and protecting trade secrets during litigation. Finally, it discusses ways companies can protect trade secrets, such as physical security measures, contractual protections like non-compete agreements, and utilizing other intellectual property protections like patents and copyrights.

1. Intellectual Property Rights
Presented by
Dr. B.Rajalingam
Assistant Professor
Department of Computer Science & Engineering
Priyadarshini College of Engineering & Technology, Nellore
Unit 4
Trade Secrete Litigation

2. Syllabus
• Trade Secrets:
Trade Secrete Law
Determination of Trade Secrete Status
Liability for Misappropriations of Trade Secrets
Protection for Submission
Trade Secrete Litigation
• Unfair Competition:
Misappropriation
Right of Publicity
False Advertising29 October 2020 2Trade Secret Law: Dr. B.Rajalingam

3. Trade Secret Litigation
Trade secret litigation comprises of two aspects :
1. Violations of trade secret law takes places when the confidential information is
obtained through misappropriations.
 Misappropriations means where someone acquires, uses and/or discloses
company trade secret without taking any permission from company in an
improper manner.
2. Violations of non disclosure agreement takes place when a party in the
contract from the breach to the agreement.
 Misappropriation in violation of a state trade secret law.
 If no written agreement exists, the plaintiff must rely upon case law.
 To protect trade secret violations, companies should require new employees who
will have access to confidential information to acknowledge in writing agreement
that accepting employment.
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4. Cont…
 If grounds for federal jurisdiction exist, the action may be brought in federal court.
 If the action also involves copyright or patent, it must be brought in federal court.
 Otherwise, the action will be brought in a state court.
 If the action is instituted in federal court, a federal court will apply state law
inasmuch as there is no general federal trade secret law.
 The UTSA provides that an action for misappropriation must be brought within
three years after misappropriation is discovered.
 In federal court, the action will be governed by the Federal Rules of Civil Procedure
relating to federal civil actions.
 These rules set the times for responding to the complaint, matters pertaining to
motions and discovery, and any other litigation related matters.
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5. Cont…
 After the complaint is filed, the defendant will respond by filing an answer, usually
denying that any breach of agreement.
 If the defendant has a cause of action to assert against the plaintiff relating to the
trade secret, it must be asserted by way of a counterclaim in the litigation so that all
disputes between the parties relating to the information can be resolved at the same
time.
 The plaintiff and defendant will take depositions to obtain testimony from those who
may have information about the case.
 For example, the plaintiff may depose individuals in the defendant’s company to
determine whether they were instructed to misappropriate the plaintiff’s information.
 Interrogatories may be served on either party to obtain information, such as to
inquire about experts either side may intend to call.
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6. Cont…
 If the matter cannot be resolved by private agreement, it will proceed to trial.
 The trade secret owner must prove misappropriation by a preponderance of the
evidence.
 Either party may request a jury trial; otherwise, a judge will render the decision.
 One of the difficult issues in trade secret litigation arises from the fact that the trade
secret sought to be protected often must be disclosed in the litigation so the judge or
jury can evaluate whether the information is sufficiently valuable.
 Similarly, the owner’s methods of protecting the information often must be disclosed
so the fact finder can determine whether the owner has taken reasonable measures to
protect the alleged trade secrets.
 Courts can fashion a variety of means to protect the information, from issuing
protective orders, to holding private hearings in the judge’s chambers, to closing the
courtroom to the public, to sealing court records.
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7. Trade Secret Protection Programs
 Because trade secrets are legally broken and may be lost by accidently disclosure or failure to
reasonably protect.
 Companies should implement trade secret protection programs to safeguard valuable
information.
 While it is common for businesses to assume that only scientific and technical data constitute
trade secrets.
 Protection is available for a much broader range of subjects, such as customer lists,
marketing plans, hiring tactics, and other information that would be valuable to a
competitor, and that are common to many companies.
 Companies that value their trade secrets should implement trade secret protection programs.
 Developing programs and measures to protect trade secrets is an easy way to demonstrate to a
court that an owner values its information and takes appropriate measures to maintain its
secrecy.
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8. Physical Protection
There are a variety of tangible measures a company can implement to protect trade secrets,
including the following:
 Safeguarding information under lock and key
 Protecting the information from unauthorized access
 Conducting background checks of employees who will have access to key information
 “Badging” doors and entrances so access beyond the company’s reception area requires key
code or bar code access and so that employee location is monitored
 Retaining adequate security during evenings and weekends either through alarm systems or
security services, including surveillance cameras
 Ensuring tours of the company premises do not expose outsiders to valuable processes or
information.
 Marking materials with legends or stamps such as “Confidential - Trade Secret Information”
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9. Cont…
 Monitoring activities of former employees who had access to confidential information and
monitoring trade journals for articles that may show a competitor has gained access to
company trade secrets
 Ensuring no one person has access to critical information but rather that several people
“share” parts of the information.
 Implementing inventory control systems
 Securing computers with password or encryption protection and monitoring devices to track
which employees access certain information.
 Requiring use of paper shredders for disposal of sensitive documents
 Designating a person to be responsible for trade secret information and release to others
(including the media), and for reviewing bids, proposals, marketing materials, and plans by
employees to publish articles or speak at conferences
 Implementing photocopying policies and maintaining logbooks or electronic monitoring of
copying.
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10. Cont…
 Monitoring employees’ use of e-mail and the Internet to ensure confidential information is not being
disseminated.
 Conducting exit interviews with employees to obtain return of company materials and to remind them of
their obligations not to use or disclose proprietary company information
 Using encryption technology and antivirus protection programs to protect information stored on
computers
 Educating employees on trade secrets and protection of trade secrets
 Requiring visitors to the premises to sign in and wear badges
 Ensuring information retained on computers is available only on company networks so that access can be
easily tracked
 Most companies will not need to implement all of the measures described.
 Courts do not require absolute secrecy or that extreme measures be taken to protect information.
 The lab is in an unmarked building in a typical office park, and visitors must pass through a metal
detector that scans for camera phones.
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11. Contractual Protection
 Another method of protecting trade secrets is by contract, namely, requiring those with access to the
information to agree in writing not to disclose the information to others.
 In licensing arrangements, trade secret owners should ensure the license agreements contain sufficient
protection for trade secret information.
 Employers should use noncompetition agreements to ensure former employees do not use material
gained on the job to later compete against the employer.
 Even without formal contracts, a company should include protection policies in its employee handbooks,
routinely publish reminders about confidentiality in company newsletters and through e-mail messages,
and remind employees of their duties during their initial orientations and during exit interviews
conducted when the individuals leave the company’s employment.
 With the advent of the Internet and the increased ease of electronic communications, employers have
become concerned about the loss of trade secrets through dissemination over the Internet.
 Thus, employers have a legitimate interest in monitoring the electronic communications of their
employees.
 Generally, employers have broad discretion to regulate the use of electronic communications in the
workplace so long as the employees have been informed that the employer may do so.
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12. Intellectual Property Protection
 Companies can also rely on other complementary methods of protection to safeguard trade
secrets.
 Any material that qualifies for copyright protection may be protected by registration or, at a
minimum, by ensuring a copyright notice is placed on the material document to afford notice
to others of the owner’s right and interest in the material.
 Inventions may be subject to patent protection, and trademarks should be fully protected by
applying for registration.
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13. Thank You
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