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PART Ⅰ THE BASICS1

Chapter r Trade Secrets—The Basics3

1.1 Apache Helicopter Airstrikes and Lady Gaga3

1.2 An Introduction to Trade Secrets5

1.3 Trade Secrets—Definition and Four Famous Examples6

1.3.1 Information6

1.3.2 Secrecy7

1.3.3 Value9

1.3.4 Reasonable Efforts10

1.4 Trade Secret Theft： Defining "Misappropriation"11

1.5 Remedies for Trade Secret Misappropriation13

1.5.1 Nonmonetary Relief13

1.5.2 Monetary Relief16

1.6 Criminal Trade Secret Law17

1.7 Trade Secrets vs.Patents： When Trade Secrets Are the Best Strategy and When They’re Not18

1.8 Summarizing Trade Secret Law21

Chapter 2 Trade Secrets in Context： Why Trade Secrets Are Increasingly Important to Businesses, Employees, and the Economy22

2.1 The Customer List in the Age of Google, LinkedIn, and Facebook22

2.2 The Evolving Technologies, Social Norms, Politics, Economics, and Dozens of Other Factors That Shape the Use and Misuse of Trade Secrets24

2.3 Trade Secrets Were Slow to Develop, Quick to Proliferate24

2.4 New Technology25

2.5 Employee Mobility and Attitudes27

2.6 Increasing Value29

2.7 The Flexible (and Expanding) Scope of Trade Secret Law30

2.8 The Future of Trade Secrets30

PART Ⅱ FOUR KEYS TO A SUCCESSFUL TRADE SECRET STRATEGY33

Chapter 3 Key No.Ⅰ： How to Recruit, Hire, Train, and Terminate Employees35

3.1 Mr.Chang’s ＄200 Million "Resignation"35

3.2 Employees Are the Primary Source of Trade Secret Misappropriation36

3.3 How to Recruit and Hire Employees37

3.3.1 Vet Applicants with an Eye Toward Trade Secret Protection37

3.3.2 Agreements with Incoming Employees38

3.3.3 Hiring from Competitors38

3.4 How to Train Employees40

3.5 How to Terminate Employees41

3.6 An Argument Against Doing Nothing44

3.7 How to Avoid a ＄2oo Million Resignation45

Chapter 4 Key No.2： Information Security46

4.1 Founder of Alpha Mining Systems： "I was like the husband whose wife was getting it on the side"46

4.2 The Right and Wrong Lessons from the Tale of Alpha’s Plundering47

4.3 One Size Does Not Fit All48

4.4 Basic Protections for Information49

4.4.1 Limit Access to Information to Only Those Who Need It49

4.4.2 Place Legends on Documents and Files49

4.4.3 Implement an Information Tracking System51

4.4.4 Dispose of Information Properly52

4.4.5 Regulate Information That Must Leave the Company52

4.4.6 Encourage Reporting of Violations and Investigate and Punish Violations53

4.5 Basic Protections for Electronic Information53

4.6 Non-memorialized Data56

4.7 Rules for Receiving Trade Secrets from Outsiders56

4.8 Government Liaisons58

4.9 Information Security Should Not Be Static58

Chapter5 Key No.3： Physical Security60

5.1 A Business Feud Turns Toxic60

5.2 The Non-digital World of Break-Ins and Dumpster Diving61

5.3 Securing Physical Confidential Information and the Facilities That House Such Information62

5.4 Be Wary of Visitors65

5.5 A Closing Note About Employee Resistance66

Chapter 6 Key No.4： Agreements to Protect Trade Secrets68

6.1 Dampening the Aloha Spirit68

6.2.The Importance of Written Agreements70

6.3 Confidentiality and Invention Assignment Agreements with Employees72

6.4 Confidentiality Agreements with Outsiders74

6.5 Parties That Refuse to Sign Confidentiality Agreements76

6.6 Noncompention and Nonsolicitation Agreements77

6.7 Confidentiality Agreements Protect Against Most Threats78

PART Ⅲ TRADE SECRETS IN PRACTICE79

Chapter 7 Investigating Suspected Trade Secret Thefi81

7.1 Informix to Commuting Oracle Employees： "Caution： Dinosaur Crossing"81

7.2 Avoiding Informix’s Fate83

7.3 Act Immediately in Response to Suspected Trade Secret Misappropriation84

7.4 Attorneys Should Direct the Investigation85

7.5 Conducting a Trade Secret Investigation86

7.5.1 Gathering Information87

7.5.2 Interviews87

7.5.3 Monitoring88

7.6 The Investigation Is Over.Now What?89

7.6.1 Do Nothing89

7.6.2 Fix the Leak89

7.6.3 Talk to the Alleged Misappropriator 9o91

7.6.4 Send Letters 9o91

7.6.5 Alternative Dispute Resolution91

7.6.6 File a Civil Lawsuit92

7.6.7 Notify Law Enforcement92

7.7 Look First, Leap Second93

Chapter 8 Knowing What You’ve Got and Whether You’re Doing Enough to Protect It：A Trade SecretAudit95

8.1 An "Information Addict" Misappropriates ＄400 Million in DuPont’s Trade Secrets95

8.2 A Trade Secret Audit Defined96

8.3 To Audit, or Not to Audit?97

8.4 The Audit Team98

8.5 The Content of a Trade Secret Audit： Identifying the Company’s Trade Secrets,Their Location, Their Value, and What Is Being Done to Protect Them99

8.6 The Audit Report102

8.7 Acting on the Audit Report103

8.8 Audit, Report, Then Repeat (a Few Years Later)104

Chapter 9 Trade Secret Litigation： What to Expect When You’re Litigating106

9.1 Night Raids and an Accidental "Confession" in the Case That Wouldn’t Die106

9.2 Working with Counsel107

9.3 Early Decisions in Trade Secret Litigation109

9.4 Important Trade Secret Litigation Lessons If You Are the Victim112

9.4.1 Don’t Pretend Everything Is a Trade Secret112

9.4.2 Coordinate Litigation Strategy with Non-litigation Conduct113

9.4.3 Expect the Accused to Go on the Offensive115

9.4.4 Consider the Impact on Customers, Suppliers, and Other Stakeholders116

9.4.5 Identify and Remember Your Goals117

9.5 Important Trade Secret Litigation Lessons If You Are the Accused119

9.5.1 Don’t Make the Situation Worse119

9.5.2 It Will Not Go Away Because You Ignore It120

9.5.3 Don’t Allow the Plaintiff to Rely on Vague Descriptions of Its Trade Secrets121

9.5.4 Conduct Your Own Investigation122

9.5.5 Don’t Wait to Take Appropriate Action—Be Proactive124

9.6 The Company That Ignores Trade Secrets Does So at Its Peril126

APPENDIX A—LIST OF CASE STUDIES127

NOTES129

INDEX143