Businesses develop mechanisms and procedures to cut costs, increase efficiency and otherwise set themselves apart from their competition. Methods and inventions developed to achieve these goals are often considered to be trade secrets of the business, and many businesses remain vigilant to guard their assets against a possible threat—for example, a departing employee who takes the business’s trade secrets and other confidential information and uses it to compete against the former employer.

To this end, businesses have lobbied for uniform federal legislation both to support businesses’ rights to protect their trade secrets and to ensure that their proprietary information will be adequately protected, regardless of the jurisdiction in which the matter arose. In 1979, the Uniform Trade Secrets Act (UTSA) was proposed by the Uniform Law Commission in an effort to provide uniformity of trade secret law across the nation and streamline trade secret litigation. Because states were free to adopt the entire act, adopt some of it, or reject it outright, many states adopted only portions of the UTSA, while customizing other sections of the act. The disjointed acceptance of the UTSA and, consequently, a divergence in courts’ interpretation of the UTSA essentially negated the “uniformity” that the UTSA sought to achieve in the first place. When facing a novel issue under the UTSA, for instance, many courts would look to their states’ “precedents” before the adoption on the UTSA rather than looking at sister courts’ treatment of the issue under their versions of the UTSA.

In a renewed effort to harmonize trade secret law, Congress passed the Defend Trade Secrets Act of 2016 (DTSA), which was enacted on May 11. Generally, the DTSA: creates a federal cause of action for misappropriation of trade secrets, thereby permitting plaintiffs to assert their claims in either state or federal courts; grants the right to seek an ex parte seizure of an alleged misappropriator’s property in an effort to contain the misappropriated trade secrets; and requires that employers provide notice of the whistleblower immunity contained within the DTSA where trade secrets or other confidential information is available to employees, consultants, and independent contractors.

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Kang Haggerty founding member Jacklyn Fetbroyt has been selected for inclusion in the 2016 Super Lawyers’ Rising Stars list, published by Thomson Reuters.

For Jackie, this is her fifth time (2010, 2013-2016) as a Rising Star in the area of Business/Corporate law – Pennsylvania.

The Super Lawyers’ Rising Stars list recognizes up and coming attorneys in each state 40 years old or younger, or those who have been practicing for 10 years or less. No more than 2.5 percent of lawyers in each state are named to the Rising Stars list. The lists are selected and published by Thomson Reuters. The selection process includes a statewide survey of lawyers, independent evaluation of candidates by an attorney-led research staff, a peer review of candidates by practice, and a good-standing and disciplinary check.

Businesses invest time and money to develop their business procedures, relationships and information, such as marketing strategies, customer information, pricing strategies, and future business development initiatives. These models and information provide businesses a competitive edge, and employers have a strong incentive to guard such assets and protect their businesses by all means reasonably necessary. Employers can typically accomplish this through using a combination of nondisclosure agreements, nonsolicitation agreements, and other restrictive covenants.

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The common interest doctrine (CID), also known as the community-of-interest doctrine, is an exception to the general rule that attorney-client privilege (ACP) is waived when privileged information is shared with a third party. The CID allows attorneys representing different clients with the same or substantially similar legal interests to agree to (and do) share privileged information without waiving the ACP.

For the CID to apply, (1) there must generally be co-parties (that is, co-plaintiffs or co-defendants—but the CID may also apply to communications between parties and nonparties, and sometimes in nonlitigation matters), (2) the co-parties must be represented by separate counsel (the CID is different from the co-client (or joint-client) privilege, which applies when multiple clients hire the same attorney to represent them on a matter of common interest), and (3) the co-parties must share a common legal interest, not merely a common commercial interest. Courts are divided on whether interests must be legally identical or somewhat less than that, such as substantially similar. And, of course, there must be an agreement among attorneys to share information.

If the above requirements are met, separate counsel for separate parties (or clients) may share information without waiving the ACP. In other words, the CID only protects communications between counsel, not between parties. Communications between parties are protected under the CID, however, if counsel is present during the communications. Continue reading ›

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