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United States: Trade Secrets Case Highlights Electronic Records Issues

September 23, 2008

United States: Trade Secrets Case Highlights Electronic Records Issues

Mondaq, September 16, 2008

A recent trade secrets case between two competing chemical companies has highlighted the issues surrounding electronic records in the courtroom. As an increasing number of biopharma companies move from paper-based lab notebooks to their electronic counterparts, the number of trade secret cases that rely on digital proof of ownership and content integrity will certainly continue to rise.

This write-up provides a quick summary of Bro-Tech Corp. v. Thermax, Inc.:

Bro-Tech Corp. v. Thermax, Inc., Case No. 05-2330, is a trade secrets case involving Bro-Tech, a designer and manufacturer of Purolite products for purifying air and water. Bro-Tech sued Thermax, one of its competitors, when some of its former employees went to work for Thermax. Thermax counterclaimed, asserting that Bro-Tech was interfering with its contractual relationships by making false accusations of trade secret misappropriation.

Bro-Tech alleges that the defendants stole proprietary Bro-Tech information, generally the basis of nearly any trade secrets case. What is different about this case compared to “old fashioned” trade secrets cases is that both parties, to effectively advocate their positions, must work through a staggering volume of electronic evidence.

The case highlights a few key facts/suggestions about managing electronic documents during litigation:

  1. “Electronic fingerprints” will almost always prove someone’s guilt or innocence. For example, if a company ill intentionally accessed a competitor’s sensitive information, various scanning tools on the market will prove its wrongful (and sometimes illegal) actions.
  2. Having control over your electronic documents will do you a world of good. If you’re able to take the reins of your “electronic filing cabinet” just like you have over your physical data, then you’ll have better success in the courtroom.
  3. Be prepared. Be prepared. Be prepared. Don’t wait for a lawsuit to land itself on your desk. Take the time now to hammer out the steps your company should take to protect its valuable intellectual property in the chance you’re taken to court.
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