A trial judge has appointed a forensic expert to help determine whether a defendant must produce information about software that a plaintiff alleges contains trade secrets.
The defendant has contended that disclosing the information will grant the plaintiff access to proprietary information he used to develop “superior software.”
Following a federal court’s example, Lackawanna County Court of Common Pleas Judge Terrence R. Nealon ruled May 21 to appoint a software discovery master to consider whether the defendant in Sandvik v. Mecca C&S should be forced to turn over sales and development information related to software used in the creation of custom-engineered power springs, which the defendant claimed contains his own trade secrets. William Mecca, who was also a defendant in the case, had worked at Sandvik Inc. from 1995 until 2009.
“The most equitable means to unravel the parties’ Gordian knot is to appoint a spring technology software expert to review the parties’ spring technology software in order to determine whether Mecca’s software incorporates Sandvik’s trade secrets and, therefore, is subject to discovery by Sandvik,” Nealon said. “The validity of Sandvik’s trade-secrets claim and the discovery of Mecca’s software are inextricably intertwined and present inseparable issues.”
According to Nealon, in 1999, the U.S. District Court for the Southern District of California’s ruling in Playboy Enterprises v. Welles first established the procedure of appointing a forensic expert to access a party’s electronically stored information to address discovery disputes and prevent disclosure of confidential information.
Nealon said the court-appointed expert will be an officer of the court and will provide the findings to Mecca, who can then either produce the findings or object for an in camera review of the information. However, if the expert determines that Mecca’s software does not use Sandvik’s trade secrets as alleged, “the parties’ discovery dispute, and presumably this litigation, would become moot,” Nealon said.
According to Nealon, Sandvik, which manufactures custom-engineered power springs, sued Mecca based on a review of the former employee’s business website. Sandvik specifically noted that Mecca’s website advertised the use of software that utilized a “finite element analysis” and an “N-value calculation term” that the company had designed, Nealon said.
Sandvik alleged breach of a nondisclosure provision and misappropriation of trade secrets and confidential business information under the Pennsylvania Uniform Trade Secrets Act. Sandvik sought information regarding Mecca’s development and sales.
Mecca contended that he developed superior spring technology software using his own ingenuity and the “finite element analysis” and an “N-value calculation term,” which he contended were publicly available, Nealon said. He further objected to the discovery, arguing that turning over the development and sales information would allow Sandvik to view trade secrets and confidential information.
The discovery master in the case granted a motion Sandvik made seeking to compel the discovery subject to a confidentiality stipulation, Nealon said. Mecca appealed the decision.
Nealon noted that, in Pennsylvania, the burden of persuasion shifts regarding discovery requests of trade secrets. He said that once the party opposing discovery establishes that the information is protected, the requesting party then has the burden to show that there is a compelling need for the information and that the necessity outweighs the disclosure.
Nealon said Mecca argued that allowing the discovery circumvented the shifting burden.
According to Nealon, Mecca has established that his technology contained trade secrets, as his designs were not generally known throughout the industry and he had undertaken measures to protect the information by using encryption software. However, because the claims were integral to Sandvik’s case, Nealon said a special software discovery master would be the best way to resolve the discovery dispute.
“In the context of electronic discovery, courts in other jurisdictions have appointed forensic experts to access the responding party’s electronically stored information in an effort to address electronic discovery disputes without unilaterally disclosing that party’s confidential or privileged information to its adversary in litigation,” Nealon said.
Nealon also noted that Sandvik argued it was unnecessary for a forensic expert to weigh in on only discovery issues; however, because Sandvik’s case depends on whether the evidence includes trade secrets, the expert’s determinations will go to the merits of the case, Nealon said.
“The most sensible solution to the parties’ discovery impasse is to appoint an appropriate expert to determine whether Mecca’s software merely embodies publicly available information and Mecca’s own sagacity or, as Sandvik contends, misappropriates Sandvik’s trade secrets and proprietary applications,” Nealon said. “Sandvik’s proffered objection to the appointment of a spring software expert for the limited purpose of discovery, as opposed to the global merits of the case, does not warrant a different course of action.”
Mecca’s attorney, Joel M. Wolff of Elliott Greenleaf in Scranton, said having a special software discovery master appointed to a case is rare, but that it struck a good balance.
“I understand the court’s decision. I think it strikes an effective balance between allowing discovery and protecting the trade secrets of my client,” Wolff said.
Plaintiffs attorney Jessica A. Stow of Morgan, Lewis & Bockius referred a call to a press officer for the firm. The press officer did not return a message seeking comment.
(Copies of the 19-page opinion in Sandvik v. Mecca C&S, PICS No. 14-0854, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •