TRADE SECRET SEGMENT

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

2. 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 IP Survey – Trade Secrets

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

4. 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 IP Survey – Trade Secrets

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

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

7. 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. IP Survey – Trade Secrets

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

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

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

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

12. 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 IP Survey – Trade Secrets

13. 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] IP Survey – Trade Secrets

14. 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 IP Survey – Trade Secrets

15. 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 IP Survey – Trade Secrets

16. 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 IP Survey – Trade Secrets

17. 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 IP 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 IP Survey – Trade Secrets 18

19. 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 IP Survey – Trade Secrets

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

21. 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 IP Survey – Trade Secrets

22. 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 IP Survey – Trade Secrets

23. 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 IP Survey – Trade Secrets

24. 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? IP Survey – Trade Secrets

25. 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 IP Survey – Trade Secrets

26. 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) IP Survey – Trade Secrets