For those of you who were able to join the recent PLI presentation on “Trade Secret Theft: Effective Tools for High Stake Disputes,” I hope you enjoyed it as much as Victoria Cundiff and I did. For those that were not, here are some of the highlights:
Hiring Employees with Non-Competes:  This remains a real source of concern for employers who do not want to get ensnared in litigation over a hire.  Victoria discussed the recent holding in IBM v. Visentin, 2011 WL 672025 (S.D.N.Y. 2011), where the Southern District of New York modified a non-compete to permit a former IBM employee to work for Hewlett-Packard because of steps the employee and Hewlett-Packard took to protect IBM’s proprietary interests.  Visentin is similar factually to the recent Aspect Software case about which I wrote last month.  In Aspect Software, the District Court of Massachusetts arrived at a different result despite similar efforts by the former employee and Avaya.  Although the holding in Aspect Software may be the exception, it reinforces the importance of selecting the right forum. 
“Procedural” Safeguards:  One question highlighted concern about the effectiveness of written agreements and other safeguards that are, at the end of the day, dependent upon the good faith of the employee or business partner receiving the confidential information.  Although there are measures to protect trade secrets that minimize or counteract this human element (encryption, monitoring data usage and access, etc.), those safeguards cannot completely eliminate the human component. 

I had the privilege of speaking on a panel in May with Malcolm Harkins, Intel’s Chief Information Security Officer, on the challenges of protecting sensitive data in the age of WikiLeaks.  While Malcolm addressed a number of procedures and techniques available to an employer, I was struck by how much he stressed the creation of a vigilant and proactive culture to protect that data.   At the end of the day, that culture, along with the reinforcment and training necessary for instilling that culture, remains the best defense.

This dovetails into another issue that arose as a result of a question, the importance of annual training and certifications/acknowledgements for the protection of confidential information.  As Victoria noted, it’s a good idea to have execution of the certifications coincide with other annual events, such as open enrollment for health insurance and annual reviews.  
Challenges for Multi-Jurisdictional Clients:  “One-state-fits-all” agreements may be difficult to enforce because of the differences in non-compete and trade secret law from state to state.  A forum selection clause may not solve that problem, as out-of-state courts may disregard the forum selection clause under choice of law principles and apply their own law if they see fit.  Victoria noted that when selecting choice of law for an agreement, it may be worthwhile to factor in where your competitors are located (for example, California) in anticipation that any dispute with a former employee make take place there.
WikiLeaks, the Internet and Trade Secrets:  Not surprisingly, this remains an issue of real concern, particularly the question of whether a trade secret claim is lost once the trade secret makes its way to the Internet.  As some may recall, I addressed this issue in a post in May; there is some authority allowing for a claim for a trade secret that has made its way to the Internet, provided one can demonstrate, among other things, that steps were taken to remove it from the Internet, that it was posted only briefly, etc.  I am going to dig deeper to see what other courts have said and put together a future post on this topic.