Corporate Practice Series Portfolio No. 43-3rd, Trade Secrets: Protection and Remedies, examines the public policy of protecting trade secrets, the definition of trade secrets, and the distinction between a trade secret and a patent.

Portfolio 43-3rd: Trade Secrets: Remedies and Protection

I. Introduction
    A. Public Policy Basis for Trade Secrets
    B. Definition of Trade Secret
         1. The Restatement of Torts
         2. The Uniform Trade Secrets Act
         3. The Restatement (Third) of Unfair Competition

II. Differences Between Patents and Trade Secrets
    A. Secrecy
    B. Subject Matter and Novelty
    C. Duration and Scope of Protection
    D. Cost to Obtain and Maintain
    E. Effect of Patent Application and Issuance on the Trade Secret

III. Licensing and Selling Trade Secrets; Tax Consequences
    A. Licensing Trade Secrets
         1. Limitations on the scope of licenses
         2. Hybrid licenses
    B. Selling Trade Secrets
    C. Tax Consequences
         1. Copyright interface with trade secret law
              a. Preemption issue
              b. Distribution of software with copyright notice
              c. Registration of software with the U.S. Copyright Office
         2. Shrink-wrap licenses
         3. Click-wrap licenses

IV. The Freedom of Information Act
    A. Introduction
    B. FOIA's Third Exemption and the Federal Trade Secrets Act
    C. FOIA's Fourth Exemption
         1. Trade secret cases
         2. Confidential information cases
         3. The Federal Trade Secrets Act and FOIA's fourth exemption
    D. Limitations of the Implementation Procedures Under Exemptions 3 and 4

V. Antitrust Issues
    A. Introduction
    B. Differences Between Patents and Trade Secrets
    C. Antitrust Issues in Trade Secret Litigation
         1. Section 1 of the Sherman Act
         2. Section 2 of the Sherman Act
         3. Bad-faith enforcement of alleged trade secrets
    D. Antitrust Issues in the Licensing of Trade Secrets
         1. Product price restraints
         2. Other licensing provisions
              a. Restrictions on disclosure
              b. Territorial restraints
              c. Duration
              d. Quantity and field-of-use restrictions
              e. Grant-back provisions
              f. Tying arrangements
    E. Department of Justice Guidelines
         1. 1988 Guidelines
         2. 1995 Guidelines
         
VI. Protecting Trade Secrets
    A. Introduction
    B. Means of Protection
         1. Internal policies
         2. Contractual means
              a. Nondisclosure agreements
              b. Noncompetition agreements
         3. Physical means
    C. Enforcing Rights Against Third Parties

VII. Remedies for Unauthorized Use and/or Disclosure of Trade Secrets
    A. Civil Actions
         1. The different types of civil actions
              a. Contract causes of action
              b. Tort of misappropriation under the Uniform Trade Secrets Act
              c. Common law tort of misappropriation
         2. General categories of civil remedies
              a. Equitable remedies
              b. Remedies at law
                   (1). Compensatory damages
                        (a). Methods of calculating damages
                        (b). Methods of calculating damages in contract actions
                   (2). Punitive damages
                   (3). Apportionment of damages
                   (4). Attorneys' fees
    B. Criminal Actions
    C. Economic Espionage Act of 1996

VIII. Trade Secret Litigation
    A. Introduction
    B. Preliminary Considerations and Risk Assessment
         1. Disclosure of the trade secret
         2. Litigation costs
              a. Time
              b. Effect on employees
              c. Effect on customers
         3. Invasive discovery
         4. Scope and limitations of protective orders
         5. Provocation of counterclaims
         6. Alternatives to litigation
    C. Insurance Coverage Issues—Litigation
    D. Pre-Filing Investigation

IX. Procedural Issues
    A. Choice of Law
    B. Statute of Limitations
         1. Claims based on breach of contract
              a. Breach of contract as a continuing wrong—Aktiebolaget Bofors v. United States
              b. Breach of contract as a one-shot event—Ford v. International Harvester Co.
         2. Claims based on tort law
              a. Trade secret misappropriation as a continuing tort—Underwater Storage, Inc. v. United States Rubber Co.
              b. Trade secret misappropriation as a noncontinuing wrong—Monolith Portland Midwest Co. v. Kaiser Aluminum & Chemical Corp.
    C. Fraudulent Concealment Doctrine
    D. Uniform Trade Secrets Act

X. Substantive Legal Questions
    A. The Plaintiff's Case
    B. The Defendant's Case
    C. Discovery
         1. Protective orders
         2. Expedited discovery and information to be obtained
         3. Identification of trade secrets
              a. Generally
              b. Specific cases

XI. Injunctive Relief
    A. Timing Problems
    B. Threatened Versus Actual Misappropriation
    C. Availability of Temporary Relief
         1. Temporary restraining orders
         2. Preliminary injunctions
    D. Problems of Proof
    E. Scope of Protection    
 

Portfolio 43-3rd: Trade Secrets: Remedies and Protection

Wks. 1 Uniform Trade Secrets Act with 1985 Amendments *

Wks. 2 States Applying the Uniform Trade Secrets Act

Wks. 3 State Competition Statutes

Wks. 4 State Statutes—Ownership Rights to Inventions and Trade Secrets

Wks. 5 Freedom of Information Act: 5 U.S.C. §552

Wks. 6 Selected Provisions—Patent Law: 35 U.S.C. §§101–103, 112, 122, 154, 171, 173, 271, 282–287

Wks. 7 Selected Provisions—Copyright Law: 17 U.S.C. §§101–106, 117, 201, 301–305, 401, 409

Wks. 8 Antitrust Guidelines for the Licensing of Intellectual Property

Wks. 9 Selected Provisions from the Economic Espionage Act of 1996: 18 U.S.C. §§1831–1839

Wks. 10 Federal Criminal Trade Secret Statutes: 18 U.S.C. §§1341, 1343, and 1905

Wks. 11 Federal Computer Fraud and Abuse Act: 18 U.S.C. § 1030

Wks. 12 State Statutes Imposing Criminal Sanctions for Trade Secret Misappropriation

Wks. 13 Employment Agreement—Assignment of Inventions

Wks. 14 Employment Agreement Containing Confidentiality and Noncompetition Provisions

Wks. 15 Employment Agreement—Noncompetition/Assignment of Inventions

Wks. 16 License Agreement

Wks. 17 Nondisclosure Agreement

Wks. 18 Supplier Disclosure Agreement (Disclosure of Technical Data to Vendor)

Wks. 19 Customer Disclosure Agreement

Wks. 20 Idea Submission Forms (Nonconfidential)

Wks. 21 Sample Protective Order—Single Classification

Wks. 22 Sample Protective Order—Multiple Tiers

Edward H. Pappas
Dickinson Wright PLLC
Bloomfield Hills, Michigan

Daniel D. Quick
Dickinson Wright PLLC
Bloomfield Hills, Michigan