USA Law and Practice Contributed by: Claudia Ray, Joseph Loy, Josh Berlowitz and Andrew (Keum Yong) Lee, Kirkland & Ellis LLP
mation to the attorneys of record for each party as well as certain designated persons (such as senior in-house counsel or expert witnesses). More stringent requirements may be sought for par - ticularly sensitive material, such as software source code or technical schematics. In all circumstances, the trade secret owner should take care to properly designate the material it deems a trade secret, and any descriptions thereof, under the appropriate degree of confidentiality provided by the stipulated protective order. Litigants should pay careful attention to jurisdic - tion and judge-specific rules for filing materials under seal or with redactions. 5.9 Defending Against Allegations of Misappropriation Defendants accused of trade secret misappropriation have several strategies available to them, depend - ing on the facts of the case. One particularly strong defence is independent development: if the defendant can show that it relied entirely on its own information or publicly available information in developing the rel - evant product or service, the plaintiff will not be able to establish that any use of its trade secrets occurred. An advantage of this defence is that the plaintiff’s defi - nition of its own trade secrets is largely immaterial to developing the defence, giving the defendant greater control over the themes and evidence it chooses to present at trial. In relation to the foregoing, defend - ants should investigate whether information claimed as part of the plaintiff’s trade secret is already in the public domain, as such information is by definition not protectable as a trade secret. Another possible defence is to show that the plain - tiff did not take proper precautions to maintain the confidentiality of the information alleged to be a trade secret. For example, if the information was shared without requiring entry into a non-disclosure agree - ment, or if the information was widely dispersed with - out adequate technological controls to keep it secure, the information may not be entitled to trade secret protection. 5.10 Dispositive Motions Parties may bring dispositive motions at several stag - es of the litigation, including prior to trial and, in some
cases, prior to engaging in discovery. Defendants may wish to bring a motion to dismiss at the outset of the litigation if the plaintiff has not met the initial pleading standards (see 5.5 Initial Pleading Standards ). If the defect in the plaintiff’s complaint is simply that the trade secrets have not been identified with the req - uisite degree of particularity, courts often permit the plaintiff to amend its complaint or provide a confiden - tial statement identifying its trade secrets in greater detail. After discovery has concluded, parties often move for summary judgment on claims or issues for which there are no material facts in dispute and the movant would be entitled to judgment as a matter of law. Motion practice at this stage has the effect of simplifying the issues for trial, if not avoiding trial altogether. If the case proceeds to trial, a party may seek judgment as a matter of law after the opposing party has presented its case at trial if the opposing party has failed to intro - duce evidence supporting a reasonable conclusion in its favour. 5.11 Cost of Litigation Litigation costs arise at every stage of the case, from the filing of a complaint to discovery to trial. Litiga - tion costs will vary depending on the types and com - plexity of the trade secrets at issue, the amount and types of discovery required, the number of witnesses to depose or to prepare for depositions, the number of expert witnesses involved and many other factors. Costs tend to be high in trade secret cases. For exam - ple, a 2021 survey by the American Intellectual Prop - erty Law Association discovered that the median cost of trade secret cases with USD10 million to USD25 million at risk is USD2.75 million. For trade secret cas - es with over USD25 million at risk, median litigation costs rise to USD4.5 million. A trade secret plaintiff (or potential plaintiff) with compelling facts may wish to consider available sources of third-party contingent litigation financing. The litigation finance industry has seen substantial growth in recent years, although this approach is not without some controversy. A party considering third- party contingent litigation financing should also stay apprised of the fast-moving legal landscape regarding
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