Can Periscope Broadcast Your Trade Secrets to the World?

Periscope is an app that allows users to broadcast live video using their smart phone. This technology has the power to transform the delivery of media and information. Essentially, every person can now effortlessly create live video content, whether it’s sharing a family event with those who can’t attend or witnessing a newsworthy event.

I keep hearing more and more about Periscope. For example, I’ve seen media members use it to share press conferences or behind-the-scenes info. At first blush, this may seem irrelevant to your company’s trade secrets. But that may not be the case.

Right now, through Periscope and similar apps, every one of your employees can instantaneously broadcast live video to the world. It’s much easier to share exactly what’s going on, in real time, at your company.

This raises multiple levels of concern. To start, employees may inadvertently transmit proprietary information. For example, an employee could be sharing a broadcast from work intended for his friends and family, while other employees discuss proprietary information within earshot. Even though there was no intent, this information was still shared outside the company.

Even worse, Periscope is a powerful tool in the hands of someone with malicious intent. There has long been a risk that malicious actors can easily capture video. But now, that video can be shared live. For example, an employee could surreptitiously broadcast a company meeting. Or live video of a proprietary process or system.

Periscope is another example of how rapidly evolving technology is constantly creating new risks to your trade secrets. Your trade-secrets policy needs periodic review to make sure it addresses new technology. Depending on the nature of your business, it may make sense to ban live broadcasts completely. Most importantly, you should discuss these issues with an attorney who can help you decide what protections are appropriate for your business.

 

 

The DOJ Announced Another Trade-Secrets Prosecution. What Does That Mean For Your Company?

There has been a lot of news coverage of the DOJ’s charges against Chinese professors for trade-secrets theft and violations of the Economic Espionage Act. Stories like this have become more common, as the DOJ has increased its focus on prosecuting trade-secrets theft. Often, these cases involve defendants with connections to foreign governments, and China in particular. As these cases have become more prevalent, the federal government has dedicated more resources to combating them.

Unfortunately, this will have little effect on most companies that fall victim to trade-secrets theft. The DOJ appears to have little interest in prosecuting run-of-the-mill trade-secrets theft, even though there may have been violations of a federal statute like the Economic Espionage Act. The DOJ simply does not have the resources to deal with the huge number of these cases. Thus, the vast majority of trade-secret misappropriation cases will be handled through civil lawsuits.

So what should you do if you believe your company has been the victim of trade-secrets theft? The answer is simple: you need to consult with an attorney specializing in this area of the law as soon as possible. Time is of the essence, and even a delay of a day or two could cause serious problems. Your attorney can advise you of your options. If your case is a good candidate for federal prosecution, your attorney should let you know. More likely, your options will involve civil remedies. Either way, you will need to make important decisions very quickly.

New Hampshire Supreme Court Rules that Trade Secrets are Not Public Records

Companies that provide services to public agencies and entities are often put in a difficult position. To win business, they must include trade secrets as part of their bid. But most documents provided to public agencies are subject to disclosure under freedom-of-information laws. The New Hampshire Supreme Court recently addressed this issue in CaremarkPCS Health, LLC v. New Hampshire Department of Administrative Services (the opinion can be downloaded here).

Caremark submitted a bid for providing pharmacy benefit management services for New Hampshire’s health plan. As part of its bid, Caremark stated that certain information provided contained trade secrets. After Caremark won the bid, the final contract also indicated that Caremark had provided the department with trade secrets.

Soon after, two of Caremark’s competitors made public-records requests to inspect Caremark’s bid. Caremark filed suit and obtained an injunction prohibiting disclosure of the trade secrets (which were not identified in the opinion). The department appealed.

The New Hampshire Supreme Court addressed the question of “whether the [Uniform Trade Secrets Act] prohibits disclosure of trade secrets[.]” They answered this question in the affirmative and upheld the injunction.

The court focused on the portion of the UTSA providing that misappropriation occurs when someone discloses a trade secret without consent, if the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use. The court ruled that the department had acquired Caremark’s trade secrets under such circumstances, for three reasons:

  • The request for proposal provided that the department would endeavor to maintain the confidentiality of those portions of the proposal “clearly and properly marked confidential”;
  • Caremark marked the information at issue as confidential and proprietary; and
  • The final contract provided that both parties were under a duty not to disclose trade secrets.

These three factors provide guidance if your company is in a similar circumstance. You need to have your attorneys carefully examine the RFP language, as well as the applicable state law, prior to submitting a bid. Then, you should mark any documents containing proprietary information and trade secrets. I would prominently affix “CONFIDENTIAL — TRADE SECRETS” on each page containing trade secrets.

Finally, do your best to negotiate the inclusion of confidentiality language in the final contract, as well as language requiring the governmental agency to inform you of any public records request that calls for the trade-secret documents (provided that those provisions are permissible under applicable law).

There is always risk when submitting trade secrets as part of a bid for a government contract. Not only could a court find that the documents are public records, but you are also relying on the government employees to recognize that requested documents were marked as containing trade secrets. Working with an attorney to implement protections like those discussed above can help minimize this risk. But in the end, you will need to make a business decision as to whether the chance of winning the contract is worth this risk.

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