How Far Do You Have to Go to Protect Trade Secrets?

How Far Do You Have to Go to Protect Trade Secrets? Erwin Wodicka

How far does a company have to go to protect its trade secrets? As Littler Mendelson partner Dylan W. Wiseman and associate Danielle G. Eanet explain on the Unfair Competition & Trade Secrets Counsel blog, a recent case demonstrates confidentiality agreements for employees and visitors might not be enough.

They say the U.S. Court of Appeals for the Fourth Circuit vacated a $920 million jury verdict and 20-year noncompete injunction awarded to the plaintiff in E.I. du Pont de Nemours v. Kolon Industries, because the lower court excluded evidence from the defendant.

DuPont alleged that Kolon stole its secrets pertaining to Kevlar, a strong fiber used in body armor and ballistics. However, Kolon alleged that one or more of the 42 trade secrets at issue were “strikingly similar” to those made publicly available during DuPont’s intellectual property litigation in the 1980s. The trial court barred Kolon from saying that.

Wiseman and Eanet say the Fourth Circuit held the defendant didn’t have to show that a trade secret was actually disclosed in previous litigation, deeming the “strikingly similar” standard sufficient to allow a jury to determine whether the information retained the level of confidentiality necessary to qualify as a protected trade secret. The case has been remanded for a new trial.

The attorneys advise companies to get “a protective order when engaged in unfair competition litigation.”