Protecting Trade Secrets During Litigation With A Protective Order

Even when trade secrets are not at issue in a litigation, companies and their lawyers need to be vigilant about protecting their proprietary information. When litigating with a competitor—or, under certain circumstances, a customer—this becomes even more important.

One of the most effective tools for protecting trade secrets in litigation is a protective order governing confidential information. In any case where there’s a chance that discovery will involve confidential or proprietary information, a protective order should be entered. To be effective, a protective order should include the following:

  • what information and documents are considered confidential,
  • how confidential information/documents are designated as such,
  • how to deal with inadvertent production of confidential information without the proper designation,
  • how to challenge a designation,
  • to whom confidential information can be disclosed,
  • the requirement that any third parties, such as experts, who receive confidential information acknowledge in writing that they are bound by the order’s terms,
  • how confidential information and documents can be used during litigation (e.g., filed under seal),
  • how to respond to a third-party subpoena seeking confidential information, and
  • what happens to confidential information after the litigation ends.

In addition to documents, the parties should be able to designate portions of deposition transcripts and other discovery responses as confidential. For deposition transcripts, the order should specify that the entire transcript is designated as confidential for a set period (say 30 days), during which time the parties can designate specific portions of the transcript as confidential.

When there is a chance that discovery will involve proprietary information, and the litigants are competitors or could otherwise benefit from having the proprietary information, it is critical to include an additional tier of confidentiality protection: the “attorneys’ eyes only” designation. Documents or information designated as “attorneys’ eyes only” can only be viewed by the parties’ attorneys — not the parties themselves.

Of course, if the information is going to be used at trial, it will become necessary for it to be disclosed in some form. I have had success including provisions requiring the parties to meet and confer on how information will be used at trial, with the court obviously having the ultimate say.

Most times, the parties are able to submit an agreed order. But where opposing counsel is unwilling to agree to material terms, such as the inclusion of an attorneys’ eyes only provision, it is worth litigating the issue.

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  1. Pingback: Damages for Trade-Secret Misappropriation: Unjust Enrichment | Protecting Trade Secrets

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