A fundamental question in every trade secret misappropriation case is: what are the alleged trade secrets that are the subject of the claim? To assist parties and courts in answering this question, the Sedona Conference recently published Commentary on the Proper Identification of Asserted Trade Secrets in Misappropriation Cases (“Commentary”) which is available for download here.
The Commentary provides four guiding principles for identifying different types of asserted trade secrets:
- the identification of an asserted trade secrets during a lawsuit is not an adjudication of the merits or a substitute for discovery;
- the party claiming trade secret misappropriation should identify in writing the asserted trade secret at an early stage of the case;
- the party claiming the existence of a trade secret must identify the asserted trade secret at a level of particularity that is reasonable under the circumstances; and
- the identification of an asserted trade secret may be amended as the case proceeds.
The Commentary also outlines eight guidelines for parties bringing or defending against trade secret misappropriation claims:
- Where the trade secret plaintiff requests preliminary relief, the scope of an identification will depend on the relief sought;
- Where the plaintiff does not request preliminary relief, the plaintiff should identify an asserted trade secret with reasonable particularity by the outset of merits discovery;
- The description of an asserted trade secret in a publicly filed pleading, or other publicly filed document, may be general if necessary to avoid destroying the status of information asserted to be a trade secret;
- The identification of an asserted trade secret under a protective order or equivalent agreement between the parties should be made with sufficient particularity to allow the defendant to meaningfully compare an asserted trade secret to information that is generally known or readily ascertainable and to permit the parties and the court to understand what information is claimed to be a trade secret;
- While an asserted trade secret should be identified at a level of particularity that is reasonable under the circumstances, a defendant should not use this standard as a tool to delay litigation by demanding particularity beyond that reasonably necessary for the defendant to develop its defenses and for the court to evaluate the claims and defenses;
- The plaintiff should not identify an asserted trade secret exclusively by reference to a document or other item, or exclusively by cross-reference to another asserted trade secret, unless such document, other item, or cross-reference sets forth the asserted trade secret;
- The plaintiff should verify its identification of an asserted trade secret under oath or affirmation; and
- If the plaintiff claims that the defendant has taken files or other materials, the court may allow motions practice and/or discovery relating to the return or inspection of such files or materials prior to requiring identification of an asserted trade secret contained within such files or materials.
This publication offers valuable thought leadership on trade secret identification issues which are often raised in misappropriation cases and insights into striking the right balance for both plaintiffs seeking to protect their valuable trade secrets and defendants attempting to defend against these allegations.