Protecting Trade Secrets in the United States 2007 US / China Legal Exchange (Xian, Beijing, Shanghai) Rex Hockaday, Caterpillar (China) Investment Co.,

Protecting Trade Secrets in the United States

2007 US / China Legal Exchange(Xian, Beijing, Shanghai)

Rex Hockaday, Caterpillar (China) Investment Co., Ltd.

2007 US/China Legal Exchange (Oct 22-26, 2007)

Protecting Trade Secrets in the US

• US Trade Secret Law

• Enforcing Trade Secret Rights

• Trade Secrets as Part of Your Business








• US Trade Secret Law– State Law– Common Law– Federal Law



• US Trade Secret Law– State Law. Uniform Trade Secrets Act (UTSA)

– What is a Trade Secret (TS)

– Misappropriation of Trade Secrets




– What is a Trade Secret– Information …

– Independent economic value

– Not generally known or readily ascertainable

– Reasonable efforts to maintain secrecy




• What is a Trade Secret– Information …





• technical & non-technical• physical & electronic• combinations








• actual or potential• to owner and others








• secret• not “absolutely” secret








• internal & external secrecy• nature & value of information



• Misappropriation of Trade Secrets (TS)– Acquisition of TS and know or have reason to know it was

acquired by improper means, or




• Misappropriation of Trade Secrets (TS)– Use or disclosure of a TS by person who

» used improper means to acquire knowledge of TS, or» knew or had reason to know TS was:

° derived by improper means, ° derived from/through person with duty to protect, or ° acquired in manner creating a duty to protect, or

» before a material change in position, knew/reason to know it was a TS acquired by accident or mistake



• US Trade Secret Law– Common Law. §757, Restatement of Torts (1939); and

§§ 39-45, Restatement (Third) of Unfair Competition (1995)

– What is a Trade Secret (TS)

– Misappropriation of Trade Secrets



• US Trade Secret Law– Common Law. §757, Restatement of Torts (1939); and

§§ 39-45, Restatement (Third) of Unfair Competition (1995)

– What is a Trade Secret– Information …

– Sufficiently valuable

– Sufficiently secret

– Provides economic advantage


Intended to be consistent with the definition of trade secrets in the UTSA.


• US Trade Secret Law– Common Law. §757, Restatement of Torts (1939); and §§

39-45, Restatement (Third) of Unfair Competition (1995)

• Misappropriation of Trade Secrets (TS)– Acquisition, use or disclosure of a trade secret

– Wrongfulness (misappropriation)


Consistent with the UTSA.


• US Trade Secret Law– Federal Law

• The Trade Secrets Act

• The Computer Fraud and Abuse Act

• The Economic Espionage Act of 1996

• The National Stolen Property Act

• Mail Fraud, Wire Fraud, etc.








• Enforcing Trade Secret Rights– Enforcement Authorities– Protecting Trade Secrets in Litigation– Case Studies



• Enforcing Trade Secret Rights– Enforcement Authorities

• State Courts (TS Statute, common law, breach of contract)– Legal Relief

» temporary & permanent injunctions» court-ordered affirmative actions

– Equitable Relief» royalties» compensatory damages» punitive damages

• Federal Courts (Statute, breach of contract)



• Enforcing Trade Secret Rights– Protecting Trade Secrets in Litigation

• Request protective order during discovery

• Request in-camera proceedings

• Courts may seal records

• Courts may order a person not to disclose alleged trade secrets without court approval

• Always at risk—hard to “un-ring the bell”



• Enforcing Trade Secret Rights– Case Studies




QUESTIONS / COMMENTS ?







• Trade Secrets as Part of Your Business– Importance of Protecting Trade Secrets– General Business Practices to Protect Trade

Secrets



• Trade Secrets as Part of Your Business– Importance of Protecting Trade Secrets

• Broadly defined, potentially everywhere

• Define & differentiate your business

• You can only protect what you know & understand



• Trade Secrets as Part of Your Business– General Business Practices to Protect TS’s

• Identify & understand your [key] trade secrets

• Protection linked to secrecy

• Practical Protection Measures

• Who is responsible for protection?

• How do you protect responsibly?




• Identify & understand your [key] trade secrets– What are your trade secrets?

– Where are your trade secrets?

– Why they are valuable?

– Who knows about them?

– How are you protecting them?










• what differentiates your products• what differentiates your business• what is “secret”









• manufacturing/R&D facilities• business centers• computer systems!









• how much competitive advantage• how easy/expensive to protect • what is the life span









• how many people “need to know”• internally & externally• who should “own” them









• responsible parties• processes & contracts• auditing



• Protection linked to secrecy– How secret (extent TS is known inside/outside the company)

– Value of TS to company

– Extent of protection measures

– Cost to develop TS

– Ease of acquisition/duplication




• Practical Protection Measures– “Reasonable under the circumstances”– Processes, documentation & contracts

» Employees» Third parties» Business

– Security (physical & systems)– Hide your secrets




• Who is responsible for protection?– Everyone is responsible to protect trade secrets

– Executive leadership should take ultimate responsibility– Experienced managers should have direct responsibility

– Everyone must feel responsible to protect trade secrets




• How do you protect responsibly?– Review: “trade secrets” are very broadly defined– How many trade secrets can you afford to protect– Understand costs:

» good business practices» incremental protection

– Sell the value to the company and the relevant partners




QUESTIONS / COMMENTS ?


Rex HockadaySenior Corporate CounselManager, Asia Pacific IP OfficeCaterpillar (China) Investment Co., Ltd.Room 1701 China Life TowerNo. 16 Chaoyangmenwai AvenueBeijing 100020, P.R. China

Phone: +86 (10) 5921 0595Mobile: +86 139 1117 2352Fax: +86 (10) 5921 0099Email:

[email protected]


Protecting Trade Secrets in the United States

2007 US / China Legal Exchange(Xian, Beijing, Shanghai)

Rex Hockaday, Caterpillar (China) Investment Co., Ltd.


Documents

Protecting Trade Secrets in the United States 2007 US / China Legal Exchange (Xian, Beijing, Shanghai) Rex Hockaday, Caterpillar (China) Investment Co.,