In the new millennium, employee mobility is the norm. Gone are the halcyon days when employees worked for one company for their entire career. One consequence of greater employee mobility is the proliferation of trade secret claims. When an employee leaves one company to work for a competitor, it is not unusual for the former employer to sue the new employer for misappropriation of trade secrets. After getting over your initial negative reaction, one of the most important responses, apart from analyzing the legitimacy of the trade secrets claim, is to protect your own trade secrets from a possible fishing expedition by a competitor.
Steps to Take to Protect Your Trade Secrets if You are Sued by a Competitor
Whether they are fishing expeditions or valid claims, lawsuits by competitors claiming violations of the Uniform Trade Secrets Act are common. If your company is involved in a trade secret lawsuit, you should identify and maintain all records relating to the process of independent development of your trade secretsi.e., inventors notebooks and business records that document the time and costs involved in developing the trade secret information. Do not allow any evidence in your possession or control to be destroyed or altered, including by automatic deletion of electronic information. Court sanctions for destroying evidence can be severe. Consider demanding that the competitor disclose trade secrets it claims were misappropriated with specificity very early in litigation.
Federal and state courts have looked very closely at the allegations made in these suits and have dismissed complaints on trade secret claims where there is not sufficient identification with specificity of the trade secret. If the litigation continues, consider protecting your trade secrets in the discovery process through protective orders restricting who can look at the trade secret information and allowing only inspections of some information without copies being taken.
What is a Trade Secret?
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