Klein & Wilson

What to do with trade secrets in a lawsuit

It may be inevitable, but a successful company may be forced to pursue a former employee who has left the company with unauthorized trade secrets. This type of employee is likely to use the information and trade secrets to start a new venture that competes with the company he or she just left.

 In these situations, what is a company to do? After all, you don’t want to disclose the very trade secrets you are trying to protect. This is a conundrum that confronts many companies, and the answer to this question may be just as complicated. One federal case,  Syngyny v. ZS Associates, Inc., may provide some guidance.

Under Synygy, a plaintiff in a trade secret case must disclose its trade secrets with “a reasonable degree of specificity and precision” so as to separate the secret from other items of general knowledge. Again, this could be a tricky proposition depending on whether you believe that the competitor already knows about the secrets and is using them in their business. If that is the case, then there may be no harm in disclosing them subject to a protective order. If the secrets have not been exploited, and a plaintiff merely suspects that the secrets have been compromised, there may be some work to be done in deftly describing the secrets without making them public record.

In either scenario, it is prudent to have an experienced attorney to carefully draft the paperwork necessary to assert the company’s right to protect its trade secrets. 

Source: Apps.americanbar.org “Disclosure of trade secrets in trade secret litigation: A frequent catch 22,” Aaron Krause, May 19, 2014

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