Advising General Counsel on Handling Trade Secret and Employee Mobility Issues February 23, 2012 An innovative law firm serving entrepreneurs and middle market companies in M&A finance, intellectual property and litigation.

THEME : Investing time to learn your client’s culture around its intellectual property will help you deliver the ultimate client experience.

“Do unto others as they would be done unto.” i.e., Serve the client in the way that the client needs to be served. THE PLATINUM RULE:

HOW TO DO THIS: Dedicate face-to-face time to meet in client’s environment; interview them to learn their goals/mission/culture/philosophy Meet/interview key stakeholders (management, R&D, HR, marketing/sales, etc.) Ask what your client believes to be the value in IP Test client’s tolerance for disclosure of IP Put simply, know your client!

QUESTIONS TO CONSIDER: Does your client truly understand what are its trade secrets? Do you share the client’s understanding as to what are the trade secrets? Does your litigation strategy align with the client’s understanding and expectations surrounding its trade secrets? Does your client have a plan for handling competitors’ trade secrets brought in by employees? Does your client have reasonable expectations regarding its ability to protect its trade secrets? (e.g., non-compete and anti-raiding agreements)

WHAT IS A TRADE SECRET? "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Civ. Code § “The trade secret is not the idea or fact itself, but information tending to communicate (disclose) the idea or fact to another. Trade secret law, in short, protects only the right to control the dissemination of information." Silvaco Data Sys. v. Intel Corp. (2010) 184 Cal.App.4th 210, 221.

THE IP AUDIT: Has your client ever conducted an audit to identify its trade secret? Offer to conduct one or to review the client's prior audit. So your client has an audit, now what? Trade secrets are not static. Not all trade secrets are created equal, or worth equal treatment — work with your client to tailor its efforts in protecting its trade secrets. Is your client taking "reasonable efforts" to maintain the secrecy? See CACI 4044 (outlining factors for the jury to consider when deciding whether reasonable efforts were undertaken to maintain secrecy).

THEME: Understand the General Counsel and the role that he/she plays within the company.

OBJECTIVE: Your primary objective is to make the GC look good.

HOW TO DO THIS: Get to know the people with whom your GC interacts To whom does the GC report? Be attuned to the issues that your GC faces Learn how he/she likes to communicate Manage expectations about scope, cost, and outcome

TRUST BUILDING “I have your back.” “How does the issue that you called me about impact you personally?” “Why does the company value you?” Is the GC seen as a “cost center” or as a contributor to the company’s success? Taking the GC’s fear out of picking up the phone and calling you

THEME: You don’t have to be everything to your client – gathering the talent and tools for handling trade secret litigation.

HOW TO DO THIS: Open up your network Stay informed on tools and trends (e.g., E-discovery, privacy/security software, changing legislation) Identify the right problem solvers for each particular issue (e.g., litigation counsel, patent specialist, client’s own in-house IT, etc.) Partner with your client's in-house team to create a portfolio of service providers that compliment your services and are pre-approved by the client.

THEME: Know the path to the end game.

HOW TO DO THIS: Set realistic goals Is it in your client's best interest to pursue all of the remedies? Damages. Unjust enrichment. Royalties (only if...). Exemplary damages. Attorney's Fees. (Civ. Code § ) Injunctions (Civ. Code § ) Federal prosecution or civil remedies of trade secret theft under the Computer Fraud and Abuse Act. State prosecution or civil remedies under Penal Code § 500. What resources can your client devote? What is your client's tolerance for litigation? Is it worth the publicity? Do not oversell. Discuss all the options, and choose the most appropriate ones.

SEEKING CLIENT FEEDBACK Create intentional client feedback program Ask clients about what they value and where they are headed Deepen relationships Manage through conflict Be willing to immediately address negative feedback

Robert Muller Founding Partner Robert is a founding partner of Cypress LLP. A member of the firm’s Intellectual Property Practice Group, his practice includes litigation and counseling in patent, copyright, trademark, trade secret, and unfair competition in all areas of media, entertainment, and technology matters. Robert’s clients seek his advice not only because of his successful track record in high-stakes disputes, but because he’s as passionate about science and technology as are his clients and he brings to bear a unique, thoughtful perspective. “I will do what it takes to really get my arms around technology and legal issues,” says Robert. “It is what makes working with creative people and IP rich companies so immensely fulfilling.”

Doug Roy Associate Doug Roy helps creative people—from artists to inventors, from high-profile entertainers to young entrepreneurs—be more creative. By economically resolving critical intellectual property and human resources issues, he takes pressure off them so they can focus on their creative work. Handling intellectual property business and legal issues is creative work, says Doug: “There is no script and there are 100 different ways to approach an issue. I work hand-in-hand with my client to find what makes the best sense financially. I am here to help my clients get their product to market, and to help them protect it once it’s there.”

Contact Information: Robert Muller Doug Roy For general inquiries, please contact the Cypress Office at

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