Identifying Trade Secrets in Litigation

May 13th, 2012 by JBWK

In an interesting New York case, a trial judge has ordered the plaintiff in a trade secrets case to disclose in discovery to the corporate defendant the precise trade secrets it accuses a former employee of stealing.

The plaintiff, a financial company, accused a former employee of stealing crucial pieces of computer code and using it on behalf of his new employer. The plaintiff, trying to avoid any further disclosure of its trade secrets, asked the judge to have the defendant turn over its computer programs instead to search for any of the plaintiff’s trade secrets embedded in it.

The judge was skeptical, ordering the plaintiff to produce the specific code it accused the employee of stealing. The case presents an interesting issue, especially in cases where the trade secrets of two competitors will be disclosed to each other. For example, if the former employee denies taking any trade secrets, he will now have obtained them directly from the plaintiff. It’s a good word of caution, especially for companies that think an employee made off with something, but isn’t positive: Plaintiffs must be prepared to fully disclose any trade secrets it accuses someone else of taking.

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