The questions focused on the current trends in trade secret disputes and the advantages of e-Disclosure in the identification and protection of sensitive information.
Q: Could you provide a brief overview of the issues surrounding trade secret identification? What trends and developments have you seen in the past 12-18 months?
Coyne: We are increasingly seeing disputes that arise as a result of entire computer programming teams being hired by competitor companies. Ultimately, following the passing of a number of months and releases of new versions of software, allegations of stolen trade secrets are not uncommon. The complainant will not wish to disclose any sensitive material to a potential competitor – even though the very nature of the claim may rest on that material – so claims generally draw attention to things like the look and feel of a product, its features or its user experience. The purpose of bringing claims could range from a genuine concern of trade secret theft, through to a desire to frustrate or delay product launch. The identification of electronically held trade secrets by the use of ‘MD5 hashing’ is becoming more popular in civil litigation, particularly when there is a need to identify large amounts of files, which is often the case in CAD design and program source code where the actual material need not be disclosed.
Q: What is the importance of the discovery phase in trade secret lawsuits? In your opinion, do parties fully understand the process and its implications?
Coyne: Whilst the discovery phase is hugely important, parties often see the process as overly intrusive. Clients will initially explain that they believe that full and proper searches have already been conducted by their internal technical resources. It often transpires that this is not the case. The key implication for the defendant is that it will define how much information they have to share with a potential competitor, which could ultimately affect their business as a whole. For the claimant, it will determine the extent to which they can investigate whether any trade secrets have been infringed. Furthermore, it could potentially expose the claimant to thoughts and processes they had not previously considered – giving them a competitive advantage. This is something that the defendant will want to avoid.