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The Defend Trade Secrets Act:
Scope, Issues and Best Practices
9 June 2016 Webinar
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Panelists
Steve M. Auvil is a partner and leader of our
IP & Technology Litigation Practice in the U.S.
David S. Elkins is a partner and leads our
global IP & Technology Practice Group
Jill S. Kirila is a partner in our
Labor & Employment Practice Group
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Agenda
1. Key DTSA provisions, open questions, and
underlying policy considerations
2. Practical considerations in bringing trade secrets claims State v. federal venue
Provisional relief
Pleading and discovery considerations
3. Practical considerations in defending DTSA claims Opposing provisional relief
Internal investigation
Identifying the purported trade secrets
4. Immunity and notice provisions
5. Best practices in avoiding DTSA claims Safeguarding trade secrets – yours and others’
Employee intake and exit processes
6. Q & A
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Ask questions or make comments as we go!
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Key DTSA provisions, open questions, and
underlying policy considerations
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Key DTSA provisions:
federal subject matter jurisdiction
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Key DTSA provisions:
ex parte seizure orders
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Key DTSA provisions:
ex parte seizure orders - requirements
a TRO “would be inadequate … because [target] would evade, avoid,
or otherwise not comply with such an order”
target “would destroy, move, hide, or otherwise make such matter
inaccessible” if the applicant were to provide that person notice
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Key DTSA provisions:
remedies
Sec. 2(b)(3)
Injunction
Damages
Actual damages and
unjust enrichment
or reasonable royalty
Exemplary damages (up to 2x)
Reasonable attorney’s fees
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Practical considerations in bringing a
trade secret claim given the DTSA’s advent
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Practical considerations in bringing a trade
secret claim
state court v. federal court
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Practical considerations in bringing a trade
secret claim
state court v. federal court
Provisional relief – availability, type, timing, enforcement
Pleading considerations
Substantive considerations
Disclosure considerations
Discovery considerations
Law enforcement considerations
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Practical considerations in defending
against DTSA claims
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Practical considerations in defending against
DTSA claims
Ex parte seizure
TRO / motion for preliminary injunction
Internal investigation – litigation hold, forensic analysis
Identifying the purported trade secrets – pleading challenge or
discovery bar?
Criminal liability considerations
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Immunity and notice provisions
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DTSA immunity
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DTSA exemption for use of trade secrets in
anti-retaliation lawsuit
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Notice requirement regarding immunity
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Notice requirement regarding immunity, cont.
Model Provision
Immunity From Liability for Confidential Disclosure of a Trade Secret to
the Government or in a Sealed Court Filing. The federal Defend Trade
Secrets Act of 2016 immunizes you against criminal and civil liability under
federal or state trade secret laws – under certain circumstances – if you
disclose a trade secret for the purpose of reporting a suspected violation of law.
Immunity is available if you disclose a trade secret in either of these two
circumstances:
(1) You disclose the trade secret (a) in confidence, (b) directly or indirectly to a
government official (federal, state or local) or to a lawyer, and (c) solely for
the purpose of reporting or investigating a suspected violation of law; or
(2) In a legal proceeding, you disclose the trade secret in the complaint or
other documents filed in the case, so long as the document is filed “under
seal” (meaning that it is not accessible to the public).
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Notice requirement FAQs
Consequence of not providing notice?
Loss of exemplary damages and attorney’s fees
Who must comply?
Employees and Contractors
Where must notice appear?
Proprietary information and assignment agreements (PIAAs)
NDAs
Also review stock option plans, severance plans, form employment
agreements
When is the notice requirement effective?
New or amended agreements after May 11, 2016
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Best practices for avoiding DTSA claims
i.e., avoiding the need to bring them and
avoiding the need to defend against them
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Best practices
1. Safeguarding trade secrets – yours and others’
2. Employee intake and exit processes
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Safeguarding trade secrets –
yours and other’s
Practical tips
Yours
No external hard drives on company computers absent authorization
Restrict access to “highly confidential” information servers
IT alerts for downloads of quantities of files or quantities of data
Email / data transmission limits
Other’s
Legal dept. review requirement for all NDAs – use own form
Strict documentation protocols
If other’s technology of no interest, say it
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Safeguarding trade secrets –
yours and other’s
Focus on inadvertent means of disclosure
Websites!
Trade shows and professional gatherings
Articles and other publications
Job interviews
Customers (consider nondisclosure agreement)
Vendors (ditto)
Consultants (nondisclosure and assignment of proprietary rights)
Studies or surveys
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New employee intake and
existing employee exit processes
New employee intake process
Confidentiality agreement / NDA
Inventions assignment agreement
• State law notices
Noncompete / nonsolicitation
• State law differences
Existing employee exit process
Written reaffirmation of NDA / PIAA
Written confirmation of return of all
company property and data
Prophylactic letter to new employer regarding ex-employee
obligations
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Questions?