E-DISCOVERY ISSUES IN TRADE SECRET IDENTIFICATION
CD: 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.
Onslow: Defecting programming teams is a classic problem. In those cases, the claimant’s source code and software architecture documents are usually present on individuals’ laptops legitimately during the period of employment; are rarely deleted after leaving the employment; are sometimes, but not always, consulted on behalf of the new employer; and whether used or not, are too often deleted in a panic shortly after the letter before action in ignorance of the duty to preserve evidence – requiring expensive forensic examination of the machine during the ensuing litigation. The evidence relied upon by the complainant to show that confidential documents were consulted and used is necessarily circumstantial in the first instance, before the disclosure stage: similarities in look and feel of the running program, apparently short development time and so on. The inherent limitations of such circumstantial evidence, where the competitor is developing with a different toolset, should be, but all too often is not, drawn to the attention of the Court by the parties during applications for interim injunction or pre-action disclosure.
Oct-Dec 2014 issue
IT Group
RPC
8 New Square