1. 20111IP Survey – Trade Secrets TRADE SECRET SEGMENT PROF. JANICKE 2011

2. 2IP Survey – Trade Secrets SOURCES OF LAW 45 STATES: UNIFORM TRADE SECRETS ACT – CIVIL TEXAS: CASELAW DOCTRINES BASED ON 1st REST. OF TORTS (1939); ALSO CRIMINAL STATUTE TEX. PENAL CODE § 32.05

3. 20113IP Survey – Trade Secrets FEDERAL: –GOVERNMENT CIVIL ACTIONS AND CRIM. PROCEEDINGS – ECONOMIC ESPIONAGE ACT (1997) –NO PRIVATE CIVIL ACTION

4. 20114IP Survey – Trade Secrets WHAT IS A “TRADE SECRET” (1) ANY COMPETITIVELY VALUABLE INFORMATION (2) THAT’S NOT WIDELY KNOWN OR EASILY FOUND OUT (3) THAT THE POSSESSOR HAS TAKEN REASONABLE STEPS TO KEEP FROM DISCLOSURE

5. 20115IP Survey – Trade Secrets EXAMPLES MFG. METHODS MFG. MATERIALS BUSINESS PLANS

6. 20116IP Survey – Trade Secrets USE, OR EVEN PLANNED USE, IN POSSESSOR’S BUSINESS IS NOT NEEDED SECRECY OF INDIVIDUAL COMPONENTS OR STEPS IS NOT NEEDED

7. 20117IP Survey – Trade Secrets THE PROBLEM OF CUSTOMER LISTS HAS CAUSED A CASE LAW QUAGMIRE OFTEN ARE EASILY LEARNED BY RIGHTFUL MEANS; HENCE NOT A “TRADE SECRET” CAN BECOME A SECRET BY ADDING PURCHASE HISTORY, PLANS, CONTACTS, ETC.

8. 20118IP Survey – Trade Secrets HARD-TO-GET REQUIREMENT LIBERALLY CONSTRUED TO HELP TRADE SECRET OWNER EXAMPLE: OBSCURE PUBLICATION OR SUPPLIER NAME

9. 20119IP Survey – Trade Secrets REASONABLE-MEASURES-FOR- SECRECY REQUIREMENT TYPICAL: EMPLOYEE AGREEMENTS MARKING DOCUMENTS AND DRAWINGS “CONFIDENTIAL” CIRCULATING WRITTEN POLICY POSTING WRITTEN POLICY

10. 201110IP Survey – Trade Secrets TYPICAL MEASURES (CONT’D): LIMIT TYPES OF EMPLOYEES WHO HAVE ACCESS LIMIT ACCESS TO PROJECT MEMBERS EXIT INTERVIEWS

11. 201111IP Survey – Trade Secrets PROTECTIVE MEASURES CAN BE BY IMPLICATION RATHER THAN EXPRESS, BUT RISKY TO LITIGATE

12. 201112IP Survey – Trade Secrets OWNERSHIP OF ON-THE-JOB DEVELOPMENTS CONTRACT PROVISION CONTROLS, IF THERE IS ONE IF THERE IS NO CONTRACT PROVISION, RESULT GOES BY THE EQUITIES GENERAL SKILLS OF A CALLING ARE ALWAYS OK FOR EMPLOYEE TO TAKE WITH HIM –DEFINING THESE IS DIFFICULT

13. 201113IP Survey – Trade Secrets WHAT IS “MISAPPROPRIATION” USING UNDER WRONGFUL CONDITIONS: –OBTAIN RIGHTFULLY, BUT USE IN BREACH OF AGREEMENT [MANY CASES] –OBTAIN BY FRAUD OR INDUCING A BREACH OF CONFIDENCE [A FEW CASES]

14. 201114IP Survey – Trade Secrets WHAT IS NOT COPYING AN OPENLY AVAILABLE PRODUCT REVERSE ENGINEERING OF AN OPENLY AVAILABLE PRODUCT WHOLLY INDEPENDENT DESIGN ADOPTING THE DESIGN, AFTER DISCLOSURE UNDER CONTRACT OF NON- CONFIDENCE

15. 201115IP Survey – Trade Secrets MOST CASES INVOLVE RIGHTFUL LEARNING, AND THEN MISAPPROPRIATING TYPICAL PATTERNS: EMPLOYEES LEARN, THEN JUMP JOINT VENTURE PARTNER LEARNS, THEN VENTURE TERMINATES POTENTIAL BUYER OF BUSINESS LEARNS, AND SALE FALLS THROUGH

16. 201116IP Survey – Trade Secrets TYPICAL PATTERNS (CONT’D): HARDER TO DECIDE: EXECUTIVE DRIVES THE DEVELOPMENT, THEN JUMPS HARDER TO DECIDE: VENDOR, AGENT, ADVISOR CONTRIBUTES THE SECRET – THEN USES FOR OTHER CLIENTS

17. 201117IP Survey – Trade Secrets HARDEST CASES: FLY-OVERS ONE DECIDED CASE TRAILING SHOULD BE OK TRASH COLLECTING MAY BE OK ON THE TRADE SECRET FRONT; PERILOUS ON CRIMINAL FRONT; AND BAD PRESS

18. 201118IP Survey – Trade Secrets 18 REMEDIES INJUNCTION PREVAILING U.S. VIEW: IF INFO HAS BEEN MADE PUBLIC BY OWNER, INJUNCTION SHOULD: –BE LIMITED TO LEAD-TIME, NOT PERPETUAL –TIME IT TOOK P minus TIME IT TOOK D IS A ROUGH RULE OF THUMB

19. 201119IP Survey – Trade Secrets TEXAS VIEW WHERE OWNER PUBLISHES THE SECRET HYDE v. HUFFINES TEX. S. CT. 1958 IS AMBIGUOUS WHERE OWNER OF SECRET PUBLISHES: –MODERN INTERPRETATION OF HYDE (PER RESTATEMENT OF UNFAIR COMPETITION) IS THAT LEAD-TIME INJUNCTION IS THE TEXAS RULE AS WELL AS THE NATIONAL RULE –HYDE WAS ENJOINED LONGER ONLY BECAUSE HE SUBMITTED NO EVIDENCE OF LEAD-TIME –PLAINTIFFS STILL ARGUE FOR A BROADER READING

20. 201120IP Survey – Trade Secrets WHERE WRONGDOER PUBLISHES THE SECRET CASES SEEM TO INDICATE LONGER- TERM INJUNCTION IS POSSIBLE, MAYBE EVEN PERPETUAL SITUATION IS UNCLEAR

21. 201121IP Survey – Trade Secrets DAMAGES ARE AVAILABLE –COMPENS. AND PUNITIVE [UTSA: TREBLING] CAN BE UNJUST ENRICHMENT OR P’S LOSS OF BUSINESS HIGH SETTLEMENT RATE TR. SEC. CASES SOMETIMES INVOLVE PRELIM. INJUNC. HEARING –SELDOM GO TO TRIAL

22. 201122IP Survey – Trade Secrets INJUNCTION AGAINST WORKING FOR A PARTICULAR COMPETITOR CAN BE HANDLED PER CONTRACT WHERE NO CONTRACT, THIS TYPE OF INJUNCTION IS COMMONLY SOUGHT TO PROTECT THE SECRET –ARGUMENT: WORKING FOR “THEM” WILL INHERENTLY DIVULGE –COUNTER-ARGUMENT: NEED TO EARN A LIVING

23. 201123IP Survey – Trade Secrets NON-COMPETE INJUNCTION WHERE NO CONTRACT PROVISION POSSIBLE SOLUTIONS: –INJUNCTION REQUIRES KEEPING PERSON ON PAYROLL AND WORKING –INJUNCTION REQUIRES PROVIDING MINIMUM CONSULTING FEES AND POSSIBLE WORK –INJUNCTION LIMITED TO COMPETITOR DIVISION MOST LIKELY TO CAUSE BREACH

24. 201124IP Survey – Trade Secrets SPECIAL PROBLEM: CONTINUING TO ENJOIN WRONGDOER WHEN OWNER HAS PUBLISHED COMMONLY UNDERSTOOD: NON- WRONGDOERS ARE RELIEVED OF COVENANTS WHEN OWNER PUBLISHES WHEN A WRONGDOER MOVES TO DISSOLVE: –SHOULD PREVIOUS WRONGDOER NOW BE THE ONLY ONE PRECLUDED FROM USE?

25. 201125IP Survey – Trade Secrets SPECIAL PROBLEM: STATUTE OF LIMITATIONS ONE VIEW: MISAPPROPRIATION IS AN ONGOING TORT, NEW VIOLATION EVERY DAY HENCE, ONLY OLD MISUSES ARE CUT OFF; DAMAGES AND INJUNCTION ARE AVAILABLE FOR RECENT/FUTURE VIOLATIONS

26. 201126IP Survey – Trade Secrets SPECIAL PROBLEM: STATUTE OF LIMITATIONS ANOTHER VIEW: ORIGINAL MISAPPROPRIATION STARTS THE ONLY CLOCK; WHEN IT RUNS, ALL ACTION IS BARRED TEXAS SOLUTION: SINGLE WRONG, SINGLE RUNNING -- BUT FROM DISCOVERY DATE (KNEW OR SHOULD HAVE KNOWN)