Trade-secrets issues often arise in cases that have nothing to do with misappropriation. Thus, all litigators need to know how to protect their clients’ trade secrets in discovery.
In a very recent Florida appellate court decision, Cooper Tire & Rubber Co. v. Cabrera et al., (Fla. 3d DCA May 8, 2013), the plaintiff sued a tire company for negligent design and manufacture of tires, after the plaintiff’s car was involved in an accident. The defendant objected to certain discovery based on the “trade secret privilege,” and provided the documents at issue to the court for an in camera inspection. The court then entered an order that, among other things, directed production of the documents, but—noting that certain documents contained trade secret information—limited disclosure to only those persons “in connection with trial preparation in the case.”
The defendant sought appellate review under a petition for writ of certiorari, which the appellate court granted, quashing the trial court order. The appellate court found that prior to ordering production of the documents, the trial court had to make findings (i) of expressly what documents contain trade secret information; and (ii) that, as to those, there is a “reasonable necessity” for production of those documents.
Parties and non-parties need to be aware of possible trade secrets or proprietary information in documents sought in discovery. These issues can often be resolved through an agreed protective order, including perhaps “attorney’s eyes only” designations.
When the parties cannot agree and litigation is necessary, the party seeking discovery needs to make sure that the judge makes specific findings. And the producing party should first try to establish that the documents contain trade secrets and are not needed in the case. If that doesn’t work, make sure that the order limits disclosure. The order in this case left way too much wiggle room that could have led to inappropriate disclosure.
Solomon Genet is a partner at Meland Russin & Budwick, P.A. in Miami, FL. He specializes in complex commercial litigation, business insolvency, and financial-fraud-related matters in the State and Federal courts.