Title
Copyright
Dedication and Acknowledgement
Foreword
Chapter 1: Overview
§ 1.01 Definition of Trade Secret
§ 1.02 Policies Underlying Trade Secret Law
[1] Generally
[2] Commercial Morality
[3] Investment in Research
[4] Exploitation of Knowledge
[5] Privacy
[6] Mobility of Labor
[7] Free Competition
[8] Confidence vs. Property
[a] An Apparent Controversy
[b] The Confidential Relationship School
[c] The Property School
[d] An Integrated View
§ 1.03 Development of Trade Secret Law
[1] Roots in the Industrial Revolution
[2] U.S. Common Law
Chapter 2: Sources of Law
§ 2.01 Case Law
[1] Generally
[2] U.S. Supreme Court
§ 2.02 Restatement of Torts
[1] Generally
[2] Nature of Trade Secrets
[3] Continuing Relevance
§ 2.03 Uniform Trade Secrets Act
[1] Background
[2] Definition of Trade Secret
[a] Generally
[b] Value From Not Being Generally Known
[c] Actual Or Potential Value
[d] Not Readily Ascertainable
[e] Efforts To Maintain Secrecy
[3] Definition of Misappropriation
[a] Generally
[b] Improper Means
[4] Remedies
[a] Court Protection of Secrets
[b] Injunctions
[c] Damages
[d] Punitive Damages
[e] Attorneys’ Fees
[5] Limitations
[6] Effect on Other Laws
[7] Acceptance by the States
[a] Generally
[b] Different Versions
[c] Future of the Uniform Act
§ 2.04 Restatement (Third) of Unfair Competition
[1] Background
[2] Definition of Trade Secret
[3] Misappropriation
[a] Generally
[b] Duty of Confidence
[c] Improper Means
[4] Remedies
[a] Generally
[b] Injunctions
[c] Damages
[5] Federal Common Law
Chapter 3: Interface with Other Laws
§ 3.01 Patent
[1] Generally
[a] Introduction to Patent Law
[b] Patent Procedures
[2] Patentable Inventions
[a] Patentable Subject Matter
[b] Utility
[c] Nonobviousness
[d] Novelty
[e] Bars From Public Use or Sale
[f] Transition from “First to Invent” to “First to File”
[3] Best Mode
[4] Preemption
[5] Choosing Form of Protection
[a] Generally
[b] Advantages of Trade Secret Protection
[c] Advantages of Patent Protection
[d] Rules of Thumb
[e] Use of Both Methods
§ 3.02 Copyright
[1] Generally
[2] Preemption
[3] Protection of Software
[4] Combined Copyright/Trade Secret Protection
§ 3.03 Other Federal Laws
[1] Trademark
[2] Antitrust
[3] Mask Work
[4] RICO
[5] Computer Fraud and Abuse Act
[6] False Claims Act
[7] Tariff Act of 1930
§ 3.04 State Laws
[1] Generally
[2] Unfair Competition
[3] Breach of Contract (Nondisclosure Agreements)
[4] Breach of Confidence
[5] Misappropriation
[6] Conversion
[7] Unjust Enrichment
[8] Breach of Fiduciary Duty/Duty of Loyalty
[9] Interference
Chapter 4: Elements of a Trade Secret
§ 4.01 Generally
[1] Basic Definitions
[2] Breadth of Coverage
[3] Boundaries of Coverage
[a] Public Interest in Access to Information
[i] Policy Requiring Definition of Secrets
[ii] Concepts and Abstractions
[iii] Know-How and Show-How
[b] Individual and Public Interest in Mobility of Labor
[i] Employee’s General Skill and Knowledge
[ii] Distinguishing Protectable Trade Secrets
§ 4.02 Protectable Information
[1] Technical Secrets
[2] Business Secrets
[a] Customers
[b] Vendors
[c] Not-for-Profit Organizations
[3] Research and “Negative” Data
§ 4.03 Novelty
[1] Generally
[2] Compilations and Combinations
[3] Protection for Ideas
§ 4.04 Secrecy
[1] Generally
[2] Degree of Secrecy Required
[a] Relative vs. Absolute Secrecy
[b] Reasonable Efforts to Maintain Secrecy
[3] Effect of Disclosure
[a] Limited Content
[b] Limited Distribution/Disclosure
[c] Disclosure in Patent
[d] Disclosure by Marketed Product
[e] Disclosure in Government Filings and Court Proceedings
[f] Inadvertent/Improper Disclosure
[g] Disclosure on the Internet
[h] Trade Shows and Tours
[4] Ready Ascertainability
§ 4.05 Competitive Advantage (Value)
[1] Generally
[2] Proof of Value
Chapter 5: Rights In Trade Secrets
§ 5.01 Ownership
[1] Generally
[a] Acquisition in Confidential Relationship
[b] Independent Discovery
[c] Joint Invention
[2] Employee Relationship
[a] Generally
[b] Invention Within Scope of Employment
[c] Invention Outside Scope of Employment; “Shop Right”
[d] Contracts Affecting Ownership
[e] Statutes Affecting Ownership
§ 5.02 Reverse Engineering
[1] Generally
[2] Reverse Engineering as Proper Acquisition
[3] Reverse Engineering In Litigation
[4] Reverse Engineering Techniques
[a] Patents
[b] Copyrights
[c] Semiconductor Designs
[d] Trade Secrets
[5] Discouraging Reverse Engineering
Chapter 6: Misappropriation
§ 6.01 Generally
§ 6.02 Acquisition By Improper Means
[1] Liability for Wrongful Acquisition
[a] New Employers
[b] Acquisition of Trade Secrets in Software
[2] What Constitutes “Improper Means”
[a] Generally
[b] Industrial Espionage
[c] Memorization
[d] Competitive Intelligence
[e] Trash
[f] Raiding Employees
§ 6.03 Unauthorized Use or Disclosure
[1] Generally
[2] Confidential Relationship
[3] Direct Use
[a] Remoteness and Experimentation
[b] Use of Executable Software
[4] Indirect Use (Derivation)
[5] Disclosure
§ 6.04 Acquisition By Accident or Mistake
[1] Appropriation Without Knowledge of Secrecy
[2] Accidental Disclosure
§ 6.05 Particular Situations
[1] Prospective Purchaser of Business
[2] Prospective Licensee
Chapter 7: Remedies
§ 7.01 Generally
§ 7.02 Provisional Remedies
[1] Seizure and Return of Property
[2] Injunction
[a] Generally
[b] Standards
[i] Generally
[ii] Inevitable Disclosure
[iii] Disclosure Following Misappropriation
[iv] Change in Circumstances Before Notice
[c] Proof
[d] Nature of Restraint
[e] Definiteness of Order
[f] Bond
[g] Contempt
[h] Appellate Review
§ 7.03 Remedies at Trial
[1] Injunction
[a] Generally
[b] Duration of Restraint
[c] Royalty in Lieu of Injunction
[2] Damages
[a] Generally
[b] Loss to Owner
[c] Unjust Enrichment
[d] Royalty Measure of Damages
[3] Punitive Damages
[4] Attorneys’ Fees
Chapter 8: Contracts
§ 8.01 Introduction
§ 8.02 Nondisclosure Agreements
[1] Generally
[2] Importance of Written Agreements
[3] Implied Agreements
[4] Permissible Scope
[a] Protection of Information Not Qualifying as a Trade Secret
[b] Enforceability Following Disclosure
[5] Form: Basic Nondisclosure Agreement
[5A] Form: “Residuals” Clause for Basic Nondisclosure Agreement
[6] Form: Basic Nonconfidentiality Agreement
[7] Form: Employee Confidentiality Agreement (Short Form)
[8] Form: Consultant Agreement
[9] Form: “Residuals” Clause for Consultant Agreement
[10] Form: Provision Regarding Personally Owned Technology
§ 8.03 Invention Assignments
[1] Generally
[2] Post-Employment Inventions
[3] Form: Employee Confidentiality and Invention Assignment Agreement
§ 8.04 Noncompetition Agreements
[1] Generally
[2] Consideration
[3] Reasonableness
[4] Partial Enforcement
[5] Defenses
[6] Statutes
[7] Choice of Law
[8] Nonsolicitation
[9] Forfeiture of Benefits
[10] Preparations Before Covenant Expires
[11] Form: Provisions for Post-Employment Restrictions on Competition
§ 8.05 Handling Trade Secrets of Others
[1] Generally
[2] Unsolicited Ideas
[3] Form: Unsolicited Idea Response and Agreement
[4] Form: Vendor’s Agreement on Joint Development with Customer
§ 8.06 Licenses
[1] Generally
[2] Form: Prospective Licensee Letter Agreement
[3] Limitations Imposed by Antitrust and Patent
Chapter 9: Prevention: Protecting Secrets and Avoiding Lawsuits
§ 9.01 Introduction
§ 9.02 Protection Programs
[1] Generally
[2] Creating a Trade Secret Protection Program
[a] Objectives
[b] Principles
[3] Elements of a Trade Secret Protection Program
[a] Facilities
[b] Documents
[c] Form: Guidelines for Invention (“Laboratory”) Notebooks
[d] Computer and Communication Systems
[e] Publications
[f] Education
[g] Contracts
[h] Form: Information and Document Control Policy.
§ 9.03 Inventory and Audits
[1] Generally
[2] Benefits and Risks
[a] Benefits Relating to Litigation
[b] Benefits in Managing Information Assets
[c] Risks
[3] Structure
[a] Flexibility
[b] Organizational Support
[c] Audit Team
[d] Initial Audit
[4] Issues to Audit
[a] Employees
[b] Information Management
[c] Document Control
[d] Facilities
[e] Publications
[f] Contracts
[g] Third Party Information
[h] Enforcement
[i] International Aspects
[5] Review Audits
§ 9.04 Employee Issues
[1] Hiring
[a] Form: Pre-employment Interview Checklist
[b] Form: Statement By Applicant Regarding Proprietary Information of Others
[c] Form: New Hire “Compliance Letter”
[2] Contracts
[3] Form: Employee Compliance Certificate
[4] Education
[5] Form: Information Protection Guidelines for Employees
[6] Termination
[a] Form: Exit Interview Checklist
[b] Form: Trade Secret Acknowledgment and Termination Agreement
[c] Form: Letter To Departing Employee
[d] Form: Letter To New Employer
[7] Consultants and Temporary Employees
§ 9.05 Third Party Issues
[1] Customers and Vendors
[2] Protecting Information Belonging to Others
[3] Joint Development of Trade Secrets
[4] Competitive Intelligence
§ 9.06 The Employee’s Perspective: Preparing To Compete
[1] Generally
[2] Planning to Leave
[3] Customers and Employees
[4] Leaving With Grace
[5] Developing Technology After Departure
[6] The Threat of Dispute
[a] Form: Customer Contact Sheet
[b] Form: Response To “Warning Letter”
Chapter 10: Preparing For Litigation
§ 10.01 Introduction
[1] Background of Trade Secret Litigation
[2] Plaintiff’s Preparatory Strategy
[3] Defendant’s Preparatory Strategy
§ 10.02 Plaintiff’s Prelitigation Issues
[1] Generally
[2] Defining Objectives
[a] Generally
[b] Settlement Strategy
[3] Case Analysis
[4] Costs of Litigation
[4A] Warning Letter
[4B] Cease and Desist Letter
[5] Injunctive and Other Immediate Relief
[5A] Temporary Restraining Order and Order to Show Cause re Preliminary Injunction, with Application Therefor
[6] Criminal Prosecution
§ 10.03 Defendant’s Preliminary Issues
[1] Defining Objectives
[2] Case Analysis
[3] Responding to a Threat Letter
[4] Initial Response to Litigation
§ 10.04 ADR and Settlement
[1] Generally
[2] Pre-Dispute Agreements
[a] Form: Arbitration Reference Clause
[b] Form: Private Dispute Resolution Clause
[3] Moving Litigation Into ADR
[4] Settlement Agreements
[5] Form: Settlement Agreement
§ 10.05 Insurance Issues
[1] Insurance Coverage
[2] Strategies Regarding Insurance
§ 10.06 Investigation
[1] Generally
[2] Process of Investigation
[3] Form: New Case Investigation Checklist
§ 10.07 Complaint
[1] Generally
[2] Court
[3] Parties
[4] Personal Jurisdiction
[5] Conflicts of Law
[6] Form: Complaint
§ 10.08 Response to Complaint
[1] Removal
[2] Motions Directed at the Complaint
§ 10.09 Defenses
[1] Generally
[2] Statute of Limitations
[3] Other Defenses
§ 10.10 Counterclaims
Chapter 11: Pretrial Issues
§ 11.01 Discovery Strategy
[1] Generally
[a] Scope of Discovery
[b] Timing of Discovery
[c] Form: Application For Expedited Discovery
[d] Form: Plaintiff’s Initial Document Request
[e] Form: Defendant’s Initial Document Request
[2] Third Party Discovery
[a] Customers and Vendors
[b] Discovery in Aid of International Litigation
[3] Discovery Motion Practice
[4] Criminal Issues
[5] Electronic Discovery
§ 11.02 Identification of Trade Secrets
[1] Background
[2] Existing Standards
[a] Case Law
[b] California Statute
[c] Flexible Approach to Identification
§ 11.03 Protective Orders Governing Discovery
[1] Generally
[2] Limitation to Counsel and Outside Experts
[3] Access by Inside Counsel
[4] Access by Patent Counsel
[5] Protection of Third Party Information
[6] Public Interest and Access
[7] Modification of Protective Orders
[8] Compliance Issues
[9] Form: Stipulated Protective Order
§ 11.04 Experts and Consultants
[1] Generally
[a] Strategy
[b] Selection
[c] Communications
[2] Technical Experts
[3] Damages Experts
[4] Litigation Consultants
[5] Court Experts and Masters
Chapter 12: Trial
§ 12.01 Trial Strategy
[1] Generally
[2] Advocacy
[a] Generally
[b] Simplification of Technology
[c] Demonstrative Evidence.
§ 12.02 Maintaining Secrecy
§ 12.03 Jury Issues
[1] Judge or Jury
[2] Jury Selection
[3] Motions In Limine
[4] Jury Instructions
[5] Form: Jury Instructions
[6] Form: Special Verdict
§ 12.04 Burdens of Proof and Persuasion
[1] Generally
[a] Circumstantial Evidence and Inferences
[b] Plaintiff’s Burden
[c] Defendant’s Burden
[2] Specific Issues
[a] Ownership
[b] Definition of Trade Secret
[i] Particularity Required
[ii] Trade Secret as Question of Fact or Law
[c] Secrecy
[i] Generally
[ii] Secrecy Efforts by Plaintiff
[d] Ready Ascertainability
[e] Misappropriation
[i] Generally
[ii] Speed of Development by Defendant
[iii] Similarity of Defendant’s Product
[iv] Derivation
[v] Intent to Misappropriate
[vi] Reverse Engineering and Independent Discovery
[f] Value and Damage
Chapter 13: Criminal Law
§ 13.01 Generally
§ 13.02 State Statutes
§ 13.03 Federal Economic Espionage Act
[1] Background
[2] Definition of a Trade Secret
[3] Prohibited Conduct
[4] Penalties and Remedies
[5] Territorial Coverage
[6] Practical Impact
[7] Text of the Act
§ 13.04 Avoiding Criminal Exposure
[1] Generally
[2] Who Should Create a Compliance Plan
[3] Objectives of a Compliance Plan
[4] Elements of a Compliance Plan
§ 13.05 Strategy Issues
[1] Generally
[2] Making a Criminal Referral
[a] Referral by Owner: Advantages
[b] Referral by Owner: Disadvantages
[c] Referral by Owner: Presenting a Case to the Authorities
[3] Defending a Criminal Charge
[a] Generally
[b] Defenses and Strategies
[c] Form: Joint Defense Agreement
[4] Suspected Theft by Company Employees
Chapter 14: Dealing With the Government
§ 14.01 Generally
§ 14.02 Disclosure to the Government
[1] Disclosure in Connection with Procurement or Licensure
[2] Compelled Disclosure
§ 14.03 Disclosure and Use By the Government
[1] Generally
[2] Freedom of Information Act
[a] Background
[b] Exemption 4 (Secrets)
[c] Exemption 3 (Statutes)
[3] Preventing Disclosure or Use
[4] Remedies for Improper Disclosure or Use
[5] Form: Sample FOIA Request
Chapter 15: International
§ 15.01 Generally
§ 15.02 Harmonization and Treaties
[1] Generally
[2] NAFTA
[a] Background and Analysis
[b] NAFTA Provisions Related to Trade Secrets
[3] GATT TRIPs
[a] Background and Analysis
[b] GATT TRIPs Provisions Related to Trade Secrets
§ 15.03 Transaction Strategies
[1] Background
[2] Protecting Trade Secrets Abroad
§ 15.04 Litigation Strategies
[1] Generally
[2] Procedural Issues
[3] International Trade Commission
§ 15.05 Selected Foreign Jurisdictions
[1] Generally
[2] North and South America
[a] Canada
[b] Mexico
[c] Brazil
[3] Asia
[a] Japan
[b] China
[c] Taiwan
[d] Korea
[e] India
[4] Europe
[a] European Union
[b] England & Wales
[c] Germany
[d] France
Index
Forms