Companies risk being forced to disclose the trade secrets they are seeking to protect when they sue a competitor for stealing them, according to Reed Smith.
In situations where a former employee is suspected of taking trade secrets to a new employer, the first option is to sue him or her and seek an injunction, the international law firm based in Pittsburgh said. The new employer may also be sued because of its possible involvement in the employee’s actions.
During a recent preliminary injunction hearing in such a dispute in Texas, SWACO requested that National Oilwell Varco LP’s trial representative leave the courtroom while its trade secrets were being discussed. The judge denied the request, telling National Oilwell’s representative that he could not use or disclose SWACO’s trade secrets.
SWACO noted in an appeal to the Texas Supreme Court that it faced a Hobson’s choice of disclosing its trade secrets to a competitor in an effort to protect them; or not enforcing its rights to keep the secrets under wraps.
Reed Smith said employers should obtain a strong protective order in such cases, ensuring that any trade secrets divulged as part of the lawsuit will only be disclosed to the attorneys involved and their experts. But, the employers must also realize that they will likely have to talk about their trade secrets in the courtroom–in front of a competitor’s representative.
