Preparing a trade secret case for resolution

Trade secret cases require a trial lawyer's strongest analytic and advocacy skills, along with detailed strategic planning. As the plaintiff, define and refine your trade secrets early and often, ultimately condensing them to the top five to 10. Both sides will dive into the forensic evidence to prove or disprove the technical development evidence, looking for any signs of shortcuts or misappropriation. Fully prepare your key witnesses: the inventor and a leading technical expert. And consider retaining a neutral evaluator to independently test your theories and themes. These steps will enable you to present the strongest case for resolution at mediation or trial.

Trade secret disclosure

In California and most other jurisdictions, a plaintiff is required to identify its trade secrets with "reasonable particularity" prior to receiving any discovery from the defendant. See California Code of Civil Procedure § 2019.210. Many plaintiffs try to avoid this requirement or get by with slapdash or overreaching disclosures. If the plaintiff evades or delays in precisely identifying and defining its trade secrets, it can cause months of unnecessary expense and motion practice and even risk alienating the court. Also, since clients will normally not be able to review the other side's highly confidential documents, a fulsome trade secret disclosure is often essential for teaching the technical expert about the trade secrets, enabling the expert to digest and understand the other side's documents. Immediate and full identification of trade secrets should be first on the plaintiff's list.

Fully identifying the client's at-risk trade secrets will likely require multiple meetings with engineers and senior executives, as well as many drafts of the disclosure. The trade secret identification must be broad enough to encompass technology or information likely to have been known or used by the defendant, but not so inclusive that it discloses technology or information the defendant doesn't know. The initial disclosure might identify 50 or more trade secrets in overlapping categories. By the time fact discovery concludes and experts testify, the number of final trade secrets should be greatly reduced. Continuously refine, limit and categorize your trade secrets until they are distilled to the seven or so you can prove at trial.

While working on the trade secret disclosure, counsel will want to retain the technical expert. The final disclosure may then be promptly provided to the expert, along with a tutorial by the inventor. The trade secret disclosure provides the gateway to the expert's work on discovery and technical opinions.

Even if it's not technically required in a jurisdiction, the defendant should insist on a detailed trade secret disclosure at the outset of the case, bringing a motion if necessary. The plaintiff normally may not define or update its trade secrets based on broad document requests or undocumented theories about the defendant's technology. The defendant will want to challenge inadequate trade secret descriptions to limit the scope of discovery and enable its expert to evaluate the claim.

Proving theft

Both sides will carefully examine the former employee's computer and company servers and scanners for evidence of copying and theft. Look for misspellings, repeated footers, metadata or other telltale markers from the plaintiff's documents that are repeated in the defendant's documents. Claims of misappropriation are also often based on technical documents or notes, especially if the plaintiff's designs or concepts are used in the defendant's design documents. The defendant's knowledge of what does and doesn't work in a particular area of technology can save months or even years of development time--the trade secret "head start"--and will support a claim of misappropriation if that knowledge was obtained through improper means or under a duty of confidentiality.

 Preparing witnesses

The most important witness in a trade secret case is the inventor or employee who best knows and can explain the trade secrets. This witness needs to be thoroughly prepared for direct examination and anticipated cross-examination. Start with the witness's background and qualifications, explore the inventive and development process for the trade secrets and derived technology and products, detail the company's efforts to safeguard the confidentiality of the technology, and explain the process by which the defendant obtained access to the trade secrets. The strength and credibility of the inventor are paramount.

The other critical witness is the technical expert witness. Your expert must write a thorough report covering all possible testimony and be fully prepared for deposition. In a complex technology case, it may take many months for the expert to learn the trade secrets and technology and to review the other side's key documents to form and support their opinions. At least several more weeks will be required for the expert to draft the report. The expert should be retained as soon as the trade secret disclosure is served. The most compelling experts are fully versed in the facts, have considered the various points of view and arguments, and are strong and persuasive without being overly argumentative and defensive on cross-examination.

The technical experts will opine on the head start gained or not gained through the alleged misappropriation, which then goes to any request for injunctive relief or damages. The experts also need to consider whether the same head start (and any related damages) would apply if the jury finds that the defendant misappropriated some but not all of the trade secrets--in other words, must the head start period and damages be apportioned among the trade secrets?

Neutral analysis

In the most important cases, consider retaining a third party neutral who is skilled in trade secret and trial law to evaluate your witnesses and case. The neutral will provide an independent view of the claims and defenses and advise about clarifying and sharpening the presentation of the evidence. A neutral may also help with powerful graphics for mediation and trial.

Trade secret claims are among a trial lawyer's most challenging and interesting cases. Diligent and hard work up front on the trade secret disclosure, evidence of alleged theft and witness preparation, and vigorous neutral evaluation can position the case for a successful mediation or trial.