Trade Secrets 2020 covers 14 jurisdictions. The first edition provides expert guidance on sources of legal protection for trade secrets, disclosure to employees, misappropriation, industrial espionage, trade secret litigation, trial, remedies and appeal.
Last Updated: April 28, 2020
As businesses around the world evaluate their options for protecting valuable intellectual property in the context of today's dynamic technological environment and a highly mobile labour force, trade secret protection can be an essential complement to patent, copyright, and trade mark protections. This is particularly true in the USA in light of recent developments in the patent system – including shifting judicial standards for patent-eligible subject matter and the expanded availability of post-grant challenges at the Patent Office – that have increased the importance of trade secret protections as an alternative vehicle for protecting intellectual property. Moreover, as the developed world continues its shift from a manufacturing economy to a knowledge-based one, where the most rapidly growing sectors offer software and services, trade secret laws are more relevant than ever.
This edition focuses on best practices for protecting trade secrets and avoiding the pitfalls of encroaching on others’ trade secret rights. A key area to which trade secret owners must remain alert is the use of technological and other protections to protect their valuable intellectual property. Recent decades have seen a sea change in the way employers recruit and maintain their workforce, including hiring a substantial number of remote employees, increased use of independent contractors, and the rise of the “gig” economy in which an ever-rotating cast of independent workers may have access to a company’s confidential information. This increased focus on remote work underscores the need to create sophisticated confidentiality measures to protect trade secrets without impairing the ready interchange of ideas and information as well as the flexible work environments that may be necessary to promote the very innovation that generates trade secrets. The days when a company could simply lock its crown jewels in a vault and rest easy knowing its trade secrets were safe has passed. At the same time, as an increasingly mobile workforce chooses to pursue new opportunities and leverage experiences from prior companies, the risk of misappropriation grows. New employers (whether leanly staffed start-ups or global heavyweights) should implement stringent procedures for insulating themselves from others’ confidential information. And former employers must remain vigilant to safeguard the improper use of their hard-earned property or risk losing it to competitors. Because disputes over trade secrets arise even when such precautions exist, we explore the latest trends in trade secret litigation and alternative dispute resolution (ADR) proceedings. Given the high stakes for both sides in a trade secret dispute, it will be important for counsel to consider the full spectrum of offensive and defensive resources that may be available under both statutory and common-law misappropriation laws and advise clients accordingly – whether that entails implementing procedures for effectively maintaining the confidentiality of its trade secrets or minimising the risk of coming into the possession of, or using, a competitor’s trade secrets.
Increasing Prevalence of DTSA Lawsuits
In the USA, just as the Uniform Trade Secret Act displaced nearly all state-specific common-law misappropriation schemes, providing a theoretically uniform body of law across the many states, Congress enacted the Defend Trade Secrets Act (DTSA) in 2016, building on earlier federal economic espionage statutes, to create a federal system of trade secret law. Now that the first wave of DTSA cases has made its way through the federal courts, we are beginning to see greater uniformity and certainty on key issues. As explored in this practice guide, a robust body of case law is developing on such topics as pleading requirements, the required particularity for descriptions of trade secrets in discovery, liability based on conduct predating the enactment of the DTSA, and allowable measures of damages. The enactment of the DTSA, not surprisingly, has resulted in a significant uptick in federal filings, as trade secret owners seek to benefit from the perceived uniformity and predictability of the federal courts. Moving forward, counsel should remain current with the latest developments in DTSA litigation, which is proving to be an indispensable part of every trade secret owner’s toolkit.
Protecting trade secrets internationally continues to be dynamic and unpredictable. Courts in the USA are just beginning to grapple with issues of liability and damages based on conduct occurring overseas. And many foreign jurisdictions are themselves still developing their trade secret jurisprudence. Global businesses must navigate the laws of each country and territory on a case-by-case basis and make informed decisions about how to safeguard trade secrets locally as well as centrally, to ensure that they do not inadvertently lose global protection for failure to comply with a single foreign law. Trade secret owners conducting business in the USA should also not forget that the United States International Trade Commission (ITC) can conduct investigations and recommend prohibitions against importing articles based on the theft of trade secrets. Although there had been a long lull in such investigations, recent years have seen a surge in investigations and enforcement actions at the ITC. As a result, companies doing business globally should stay apprised of the latest developments in litigation involving international parties, whether in the federal court system, at the ITC, or globally. That part, we assure you, is not a secret.