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One of the ways trade secret disputes differ from other IP litigation is that in a trade secret dispute it is not always clear what the intellectual property actually is. Trade secrets aren’t disclosed to the patent office or registered like trademarks. Nor are they as clearly defined as copyrights. Thus, a threshold question in every trade secret case is what the trade secrets actually are. This creates a natural tension, as the very definition of a trade secret includes that it be kept secret. Nonetheless, litigation cannot proceed in the dark and there must be some disclosure at some time before a case can be meaningfully resolved. Courts vary widely in their approach to the what and the when of these disclosures. Some require detailed specificity before any discovery can occur, sometimes even at the pleading stage. Other courts are more lenient and will allow discovery to proceed without first requiring early and detailed disclosures.
Continue Reading Sedona Conference Lists Principles for Identification of Trade Secrets

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Computer forensic information often becomes an issue in trade secret cases, as computer artifacts or other electronic information (such as on external hard drives, cell phones, etc.) can sometimes prove or disprove whether a person accessed, used, transferred, or destroyed trade secret material. If the parties or the judge determines that the computer forensic information is relevant, the next key question is how much needs to be exchanged and what limitations will be in place. The producing party often will argue that computers include numerous irrelevant files and artifacts, privileged communications, and private information that should not be subject to discovery. One middle ground is to use a neutral examiner, in which the electronic data is never handed directly to the opposing party. Instead, a neutral computer expert will field requests and/or create reports of the pertinent data.
Continue Reading Chinese Self-Driving Car Company Must Make Its Source Code Available in Lawsuit Against Tesla but Only Through a Neutral Examiner

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Alleged spoliation of evidence is unfortunately a somewhat common feature of many trade secret misappropriation cases. A recent district court order out of the Northern District of California, WeRide Corp. v. Kun Huang, highlighted just how serious the penalty for spoliation can be. No. 5:18-CV-07233-EJD, 2020 WL 1967209 (N.D. Cal. Apr. 24, 2020).

In WeRide, the defendant deleted entire email accounts, failed to disable its email server’s setting that automatically deleted all emails older than 90 days, and deleted relevant source code even after the court entered a preliminary injunction specifically enjoining the parties from destroying relevant documents. Taking into account the vast quantity of data deleted, along with the willful nature of the spoliation, the court granted sanctions of default, striking the defendants’ answers and directing judgment for the plaintiff.
Continue Reading The Northern District of California Reminds Everyone How Serious Spoliation Sanctions Can Be

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Determining when a plaintiff must disclose and describe the trade secrets it alleges were misappropriated is often a hard-fought battle between the parties.

On the one hand, some plaintiffs want to fully discover the scope of the misappropriation before limiting their claims to only a subset of their trade secrets. Given the often-surreptitious nature of trade secret misappropriation, plaintiffs are sometimes concerned that they do not even know which trade secrets were misappropriated, so they could not reasonably identify their trade secrets early in the case. Defendants, on the other hand, often advocate for early disclosure of the trade secrets to narrow the case, limit discovery, and mitigate the risk that the plaintiff will belatedly craft its definition of what constitutes its “trade secret” from what it finds in discovery.
Continue Reading Courts Differ on Timing and Scope of Trade Secret Identification