A recent federal district court ruling serves as an important reminder that a former employee may be held liable for trade secret misappropriation even if the alleged trade secrets are not physically or electronically taken by the departing employee, but instead retained only in memory.Continue Reading Evidence of a Defendant’s Physical or Digital Retention of Trade Secret Information Is Not Required to Prove Trade Secret Misappropriation Under the California Uniform Trade Secrets Act
For most (if not all) professional services firms, client databases, client contact lists, and information reflecting client preferences are regarded by such firms as trade secrets that are essential to the business. Invariably, businesses identify this type of information as proprietary and trade secret in their employee confidentiality agreements and handbooks and subject them to duties of confidentiality. However, a recent federal ruling provides an important reminder that the term “trade secret” is a legal term of art subject to strict standards and merely labeling general categories of company information as trade secrets does not make them so—no matter how important the information is to the business. To be prepared to protect their trade secrets from misappropriation, firms should take inventory of what they regard as their trade secrets and critically assess whether they actually qualify as such, and if not, whether steps can be taken to make them qualify.
Continue Reading Reminder to Professional Services Firms – Do Not Take Your Trade Secrets for Granted
Courts often require a plaintiff to identify a trade secret with reasonable particularity before commencing discovery (and it is a statutory obligation in California). But frequently a trade-secret plaintiff does not know precisely which trade secrets have been taken by the defendant before discovery commences. In the recent Ninth Circuit decision InteliClear v. ETC Global Holdings (9th Cir. Oct. 15, 2020), the appellate court held that, under its particular circumstances, a plaintiff who had not adequately specified its trade secrets at issue should nevertheless be permitted to engage in discovery for this purpose, where the plaintiff had shown discovery could provide the necessary information. (Disclaimer: Sheppard Mullin served as co-counsel to the successful appellant-plaintiff in this case.)
Continue Reading Trade Secret Takeaways from the Ninth Circuit’s Decision in InteliClear, LLC v. ETC Global Holdings, Inc.