FL: What impact has your engineering education and technical background had on your experience in practice?
It's been a tremendous asset in both trade secret and patent cases, especially if the technology at issue is at all complicated. Whether I'm dealing with circuits, internals of semiconductors, or details of a semiconductor manufacturing process, having a good grasp of the technology and engineering has given me a leg up in terms of identifying issues, and understanding the nuances of those issues. I feel that I get a significant competitive edge by having that background, if nothing else, just as a practical matter in terms of interaction with experts and clients on technical matters.
FL: Do you feel that the state of the economy or marketplace stability has an impact on trends in trade secret disputes?
Yes, I believe the economy has had some impact. I think there are smaller cases that would have been brought in a more robust economy, simply because there was more money available to pursue them, and those cases aren't being brought now because the money isn't there to support it. It might not be economically feasible to take action now in some smaller cases, for example involving a customer list of a small business,where a former employee has branched off and started a competing small business. On bigger trade secret cases, like a recent one involving one of the bigger software companies for example, I don't think the economy has had a significant impact. I don't believe there is significantly less activity in terms of misappropriation of trade secrets in a down economy than in an up economy, though the reasons for the activity may differ.
FL: When a non-disclosure agreement comes into play, what are some of the key areas that should be covered to effectively provide trade secret protection?
One of the things I believe is, not only should the confidentiality agreement require non-disclosure by whoever is signing it, but it should also specifically require non-use. I also like to have a provision specifically requiring the obligated party to use at least the level of effort required by California law to maintain trade secret status by the holder in the first instance, and provisions that consent to certain immediate relief in the event of a threatened or actual disclosure.
FL: It affords a deeper level of protection?
That's been my view.Most confidentiality agreements that I see are pretty standard, so there isn't any real magic to them anymore. Generally, I want to make sure that they are limited to people with a need to know. Even if you are planning to permit some disclosure within an organization, I usually want to limit the scope of that disclosure. This is because the more people that gain knowledge of the information, the greater the chance there is going to be unauthorized disclosure or use, even inadvertently.
FL: In terms of protecting a company's information in the electronic age, do you view the future regarding the balance between an employer's right monitor its employees, and the employees' right to privacy?
I may have a conservative viewpoint on this, and this would be my viewpoint and not necessarily that of the firm. But my belief is that there should be little expectation of privacy in the workplace, generally speaking. For example, if a company has a network and Internet access set up for its employees to use in their jobs, then unless otherwise stated, those tools are provided for the benefit of the organization. If employees wish to utilize those tools for personal use, then I personally don't have any qualms with the organization overseeing use of the equipment. And, if employees wish to use those tools or facilities to disseminate the organization's confidential information, the organization has a legitimate right to protect itself in my view.
FL: You see it as an at-your-own-risk situation?
That's my view on it. Certainly, a lot of people may disagree with me, even in my own organization.
FL: In what instances might trade secret protection be preferable to patent protection, and vice versa?
One situation that immediately comes to mind is where you have a subject matter that has a very short life span, and that is not readily reverse-engineerable. If you pursue patent protection for the subject you feel is your trade secret, you end up having to disclose it.We now have a system where most new U.S. patent applications get published roughly 18 months after the filing date. So, within about 18 months your trade secret is going to be publicly disclosed. But, you may not get a patent issued for a few years depending on the subject matter. If your subject matter is a technology with a short life span, and it may be only a few years before the next innovation comes along and your subject matter becomes less valuable, you may well want to simply keep it a trade secret if you can rather than seek patent protection. On the opposite end of the spectrum, you may have subject matter with a very long lifetime and that is not readily reverse-engineered.You can seek a patent, disclose the trade secret, and take the 20 years of protection, but after that it becomes public knowledge. If you think you can maintain the secrecy of the subject matter, and maintain a competitive advantage for many years because the subject matter is not readily reverse-engineerable, you might instead choose to maintain the trade secret. The classic example of this is Coca-Cola. They have maintained their formula as a trade secret for decades. Internal manufacturing processes is another subject that is conducive to trade secret protection. However, many products are readily reverseengineerable once they hit the market, and patent protection may be preferable for that subject matter.
FL: For potential clients who may be looking for legal help with a trade secret matter, what is it that you feel sets Townsend apart from other firms specializing in IP?
A number of things.A big one is that some firms that say they specialize in IP really don't. They may have a few attorneys who have some experience with IP related matters, often what we call ìsoft IPî but they don't have the depth and breadth of experience that Townsend has with hard core technical trade secret and patent cases. We have a relatively large number of attorneys here who have done essentially nothing but hard core, technically-oriented cases for years, as well as litigators who work every day on complex commercial disputes.And, as I said above, many of us have technical training and experience in technical industries that prospective clients just won't find at other firms, even those firms that claim to specialize in IP.
FL: Location doesn't hurt either.
Absolutely.We're right where the action is. I moved out here from Chicago specifically because I wanted to work in this environment. The technical community here makes this an exciting place to be. You have companies starting, companies closing, and companies acquiring and being acquired all the time. People here, especially technical people, seem to change companies fairly frequently, and new ideas are being exchanged all the time. The entrepreneurial spirit is strong here. It's also a very small community in terms of information flow and that's important to understand. Because we live and work here, we do understand that.All six of Townsend's offices are really located in hotbeds for the kinds of activities that can result in trade secret issues.