USA – PENNSYLVANIA Trends and Developments Contributed by: Leigh Ann Buziak, Kevin Passerini, William Cruse and Timothy (“Timmy”) J. Miller, Blank Rome LLP
ing their response to the potential misappropriation. This preparation is all the more essential because the onus to enforce policies and practices and address any theft lies with the company itself. That burden car - ries over should litigation be necessary, requiring that companies have the information necessary to plead a claim for misappropriation of trade secrets and to meet the standard for receiving interim equitable relief, such as an injunction or forensic inspection. Even where misappropriation is not prevented, the information yielded from hands-on monitoring and detection is beneficial to companies when litigation is ultimately required, especially in trade secrets liti - gation in federal court in the Third Circuit, which has joined the growing majority of federal courts requir - ing plaintiffs to identify the trade secrets and alleged misappropriation with particularity. See, eg, Mallet and Company Inc. v Lacayo , 16 F.4th 364 (3d Cir. 2021) (holding that general descriptions of categories of trade secrets were insufficient to uphold a preliminary injunction). And while courts applying this standard have observed that a company does not need to have “direct evidence tying each trade secret to a defend - ant’s acquisitive conduct”, they have indicated that the company must still plead the existence of specific and identifiable trade secrets – evaluated on a “fact- specific” and “case-by-case” basis by the courts – in order to proceed past the pleading stages. See, eg, Oakwood Labs., LLC v Thanoo , 999 F.3d 892, 907-908 (3d Cir. 2021) (discussing that the amended plead - ing sufficiently identified the exact categories of the trade secrets at issue and provided specific examples of documents that contained the trade secrets). As highlighted in Oakwood , even though some versions of the complaints had “arguably” identified the trade secrets with sufficient specificity, the plaintiff’s com - plaints were still dismissed several times by the dis - trict court until the issue had to be taken up on appeal. In light of such heightened standards and the fact- specific, case-by-case scrutiny companies face in trade secrets litigation at both the pleading and pre - liminary injunction stages, there are multiple steps that a company can take to streamline its investigation, quickly identify the information and activity at issue, and provide information critical for any court filing seeking relief.
Step one: exit interviews Exit interviews often enable a company to detect and address potential misappropriation, and provide departing or former employees with an opportunity to co-operate with the company to identify, return, and delete trade secrets and other sensitive, confidential information without the need for litigation. Interviewers should be trained to ask questions that gather information on the employee’s return-of- property and confidentiality obligations as well as the employee’s post-employment plans. Interviewers should ask whether the employee has ever used USB drives or personal cloud or email accounts to store, view, print, or transmit company data and whether the employee has ever downloaded or copied any com - pany information to personal devices, flagging any instances for further review. The interviewer should also confer with appropriate legal team members on the recommended response and any necessary fol - low-up steps to ensure that the employee complies with their obligations. Step two: investigation and forensic inspection In addition to discussions with the former employee, the information technology and security team mem - bers should advise departing employees, particularly those who may have accessed or exfiltrated company data, that they should not delete any data or informa- tion and should not reset or reformat any company device so that all relevant data is preserved. All com - pany devices (eg, computers, cell phones, tablets, and USB drives) should be returned to the company in an unaltered state whenever possible. This is criti - cal, as the devices may need to be forensically imaged for review, and the alteration or destruction of data, including metadata, will impede an investigation as to whether and how data exfiltration occurred. Compa - ny accounts, or any other accounts that may contain company data should be treated similarly. When analysing devices and accounts for potential misappropriation, there are some common indicators that companies and the investigating teams should be on the lookout for, including: • an employee forwarding company documents to personal email accounts;
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