TRADE SECRETS

A Practitioner’s Guide

Second Edition

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TRADE SECRETS

A Practitioner’s Guide

Second Edition

Henry H. Perritt, Jr.

Incorporating Release #12July 2017#205885

Practising Law InstituteNew York City

#7792

This work is designed to provide practical and usefulinformation on the subject matter covered. However, it issold with the understanding that neither the publisher northe author is engaged in rendering legal, accounting, orother professional services. If legal advice or other expertassistance is required, the services of a competent profes-sional should be sought.

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Copyright © 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003,2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015,2016, 2017 by Practising Law Institute. All rights reserved. Printed in theUnited States of America. No part of this publication may be reproduced,stored in a retrieval system, or transmitted in any form by any means,electronic, mechanical, photocopying, recording, or otherwise, without theprior written permission of Practising Law Institute.

LCCN: 2005932396ISBN: 978-1-4024-0642-3

About the Author

HENRY H. PERRITT, JR., is a Professor of Law at Chicago-Kent Collegeof Law, part of the Illinois Institute of Technology. He served asChicago-Kent’s dean from 1997 to 2002. He was the Democraticcandidate for the U.S. House of Representatives in the Tenth Districtof Illinois in 2002 while on leave from Chicago-Kent.

Throughout his academic career, Professor Perritt has made itpossible for groups of law and engineering students to work togetherto build a rule of law, promote the free press, assist in economicdevelopment, and provide refugee aid in the former Yugoslaviathrough “Project Bosnia” and “Operation Kosovo,” and to buildlinks with educational and governmental institutions in China andMexico.

Professor Perritt is the author of more than seventy-five lawreview articles and seventeen books on international relationsand law, technology and law, and employment law, including the730-page Law and the Information Superhighway, and two bookson Kosovo. He served on President Clinton’s Transition Team,working on telecommunications issues, and drafted principles forelectronic dissemination of public information, which formed thecore of the Electronic Freedom of Information Act Amendmentsadopted by Congress in 1996. During the Ford administration, heserved on the White House staff and as deputy under secretary oflabor.

Professor Perritt served on the Computer Science and Telecom-munications Policy Board of the National Research Council, and ona National Research Council committee on “Global Networks andLocal Values.” He was a member of the interprofessional team thatevaluated the FBI’s Carnivore system. He serves as a neutral for theWorld Intellectual Property Organization’s domain-name disputeresolution service. He is a member of the bars of Virginia,Pennsylvania, the District of Columbia, Maryland, Illinois, and theUnited States Supreme Court. He is a member of the Council ofForeign Relations and of the Economic Club, is on the board ofdirectors of the Chicago Council on Foreign Relations, and hasserved as secretary of the Section on Labor and Employment Law ofthe American Bar Association.

Professor Perritt earned his B.S. in engineering from MIT in 1966,a master ’s degree in management from MIT’s Sloan School in 1970,and a J.D. from Georgetown University Law Center in 1975.

vii(Perritt, Rel. #12, 7/17)

Table of Chapters

Chapter 1 Introduction

Chapter 2 Other Protections for Innovation, Information, andKnow-How

Chapter 3 Subject Matter of Trade Secrets

Chapter 4 Secrecy

Chapter 5 Competitive Advantage, Novelty, and Investment

Chapter 6 Wrongful Use: Special Relationships

Chapter 7 Wrongful Acquisition or Use by Strangers

Chapter 8 Defenses

Chapter 9 Transferring Rights

Chapter 10 Litigation

Chapter 11 Settling Disputes

Chapter 12 Trial

Chapter 13 Remedies

Chapter 14 International Disputes

(Perritt, Rel. #12, 7/17) ix

(Perritt, Rel. #12, 7/17)

Table of Contents

About the Author ...........................................................................vii

Table of Chapters............................................................................ix

Chapter 1 Introduction

§ 1:1 Overview of the Book ..................................................... 1-1§ 1:2 Basic Elements of the Tort.............................................. 1-3

§ 1:2.1 Trade Secret............................................................. 1-4§ 1:2.2 Misappropriation .................................................... 1-7

§ 1:3 Contractual Protection for Trade Secrets ........................ 1-8§ 1:4 The Property View Versus the Tort View of

Trade Secrets................................................................... 1-9§ 1:5 Sources of Law.............................................................. 1-12

§ 1:5.1 Uniform Trade Secrets Act.................................... 1-12§ 1:5.2 Defend Trade Secrets Act of 2016......................... 1-16§ 1:5.3 Restatement (Third) of Unfair Competition ......... 1-19§ 1:5.4 Restatement of Torts ............................................. 1-19§ 1:5.5 State Statutory Preemption of Common Law....... 1-21

§ 1:6 Federal Law................................................................... 1-29§ 1:6.1 Analogies to Other Types of Intellectual

Property Protection ............................................... 1-29§ 1:6.2 Policy .................................................................... 1-30

§ 1:7 Historical Development................................................ 1-31§ 1:8 Trends ........................................................................... 1-38§ 1:9 Insurance ...................................................................... 1-39§ 1:10 Checklist for Potential Plaintiffs and Owners of

Trade Secrets................................................................. 1-39§ 1:10.1 Preventive Measures ............................................. 1-39§ 1:10.2 Litigation Checklist .............................................. 1-41

§ 1:11 Checklist for Potential Defendants............................... 1-42

Chapter 2 Other Protections for Innovation,Information, and Know-How

§ 2:1 Introduction and Overview............................................. 2-2§ 2:2 The Bundle of Rights...................................................... 2-5§ 2:3 Patent............................................................................ 2-10

xi

§ 2:3.1 Patent Application Disclosure............................... 2-17§ 2:3.2 Business Methods Patents..................................... 2-18§ 2:3.3 Patent Reform ....................................................... 2-21§ 2:3.4 Trade Secret or Patent? ......................................... 2-25

§ 2:4 Copyright...................................................................... 2-27§ 2:4.1 Originality: Facts Not Eligible for Copyright ........ 2-29§ 2:4.2 Limited Protection ................................................ 2-32

[A] Musical Work or Sound Recording?...................... 2-36[B] Privileges and Defenses......................................... 2-36

§ 2:4.3 Derivative Works .................................................. 2-38§ 2:4.4 Indirect or Secondary Infringement ...................... 2-41§ 2:4.5 Digital Millennium Copyright Act ....................... 2-48

[A] Defeating Technological Protection....................... 2-48[B] Safe Harbor for Intermediaries.............................. 2-48

§ 2:4.6 Collective Licensing .............................................. 2-59§ 2:4.7 Statutory Damages................................................ 2-61§ 2:4.8 Injunctions............................................................ 2-62

§ 2:5 General Misappropriation Tort ..................................... 2-63§ 2:6 Unfair Competition ...................................................... 2-68§ 2:7 Trademark..................................................................... 2-69

§ 2:7.1 Dilution of Famous Marks ................................... 2-78§ 2:7.2 Internet Domain Names and Trademarks............ 2-79§ 2:7.3 Trade Dress ........................................................... 2-84

§ 2:8 Constitutional Limits on Intellectual Property............. 2-86§ 2:9 Preemption by Federal Law........................................... 2-88§ 2:10 Coexistence................................................................... 2-88§ 2:11 Intentional Interference with Contractual Relations .... 2-93

§ 2:11.1 Defamation ........................................................... 2-94§ 2:11.2 Computer Fraud and Abuse Act ........................... 2-94§ 2:11.3 Electronic Communications Privacy Act .............. 2-98

§ 2:12 RICO ............................................................................ 2-99§ 2:13 Strategy ....................................................................... 2-105

Chapter 3 Subject Matter of Trade Secrets

§ 3:1 Introduction and Overview............................................. 3-2§ 3:2 Restatement Definition .................................................. 3-3§ 3:3 Uniform Act Provisions.................................................. 3-4§ 3:4 Question of Fact or of Law?............................................ 3-6§ 3:5 Comparison with the Subject Matter of Other Types

of Intellectual Property ................................................... 3-7§ 3:5.1 Copyright ................................................................ 3-7§ 3:5.2 Patent...................................................................... 3-8

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§ 3:6 Know-How Distinguished............................................... 3-8§ 3:7 “Used in Plaintiff ’s Business” Requirement ................. 3-11§ 3:8 Nonbusiness Information............................................. 3-14§ 3:9 Specific Subjects............................................................ 3-18

§ 3:9.1 Production and Operations ................................... 3-19[A] Manufacturing Process.......................................... 3-19[B] Information About Clients, Customers, or

Patients ................................................................. 3-22[C] Product Design ..................................................... 3-23[D] Product Formulas.................................................. 3-26[E] Information for Production Versus Information

As Product ............................................................ 3-27[F] Business Methods ................................................. 3-28

§ 3:9.2 Engineering and Research and Development........ 3-29[A] Reverse Engineering .............................................. 3-30[B] Safety and Health Effects ...................................... 3-30

§ 3:9.3 Marketing ............................................................. 3-31[A] Generally............................................................... 3-31[B] Opinion Survey Questions.................................... 3-34[C] Wholesaling Methods ........................................... 3-34[D] Marketing Strategies ............................................. 3-35[E] Customer Lists...................................................... 3-35[F] Customer Pricing .................................................. 3-42[G] Contract Renewal Dates ....................................... 3-43

§ 3:9.4 Finance and Strategic Business Plans ................... 3-44§ 3:9.5 Purchasing Information ........................................ 3-47§ 3:9.6 Management Techniques and Organization

Design................................................................... 3-47§ 3:10 Legal Information ......................................................... 3-48§ 3:11 Religious Materials ....................................................... 3-48§ 3:12 Memorized Information ............................................... 3-49§ 3:13 Employee Information .................................................. 3-50§ 3:14 Educational Tests .......................................................... 3-51§ 3:15 Software Source Code ................................................... 3-51

Chapter 4 Secrecy

§ 4:1 Introduction and Overview............................................. 4-2§ 4:2 Relationship to Subject Matter Elements ....................... 4-4§ 4:3 Relationship to Wrongful Acquisition Elements ............. 4-4§ 4:4 Coexistence with Copyright ........................................... 4-5§ 4:5 Coexistence with Patents................................................ 4-5§ 4:6 Absolute Secrecy Not Required....................................... 4-6

(Perritt, Rel. #12, 7/17)

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xiii

§ 4:7 Mass Marketing.............................................................. 4-9§ 4:8 Relationship to Breach of Confidentiality

Agreements ................................................................... 4-10§ 4:9 Secrecy Ended by Disclosure......................................... 4-11

§ 4:9.1 Wrongful Disclosure.............................................. 4-11§ 4:9.2 Disclosure by Licensee: Is Secrecy Destroyed?...... 4-12§ 4:9.3 Revealed Through Patents..................................... 4-13§ 4:9.4 Revealed in Copyright Registration....................... 4-16§ 4:9.5 Revealed to the Government ................................ 4-16§ 4:9.6 Revealed Through the General Media .................. 4-18§ 4:9.7 Required to Be Disclosed by Regulation................ 4-21§ 4:9.8 Discovered Through Accidental Disclosure .......... 4-21§ 4:9.9 Revealed by Product .............................................. 4-22

§ 4:10 Known to Industry........................................................ 4-23§ 4:11 Secret Compilations of Generally Known Facts ........... 4-24§ 4:12 Not Known but Readily Ascertainable.......................... 4-25§ 4:13 Security Measures......................................................... 4-28

§ 4:13.1 Proprietary Notices ............................................... 4-28§ 4:13.2 Excessive Claims of Secrecy.................................. 4-34§ 4:13.3 Confidentiality Agreements .................................. 4-34

[A] Employees ............................................................. 4-34[B] Customers and Suppliers ...................................... 4-38[C] Confidentiality Agreement Language.................... 4-42

§ 4:13.4 Restricting Access ................................................. 4-43§ 4:14 Testimony Establishing Secrecy .................................... 4-48

Chapter 5 Competitive Advantage, Novelty, andInvestment

§ 5:1 Summary and Overview ................................................. 5-1§ 5:2 Relationship to Other Forms of Intellectual

Property .......................................................................... 5-2§ 5:3 Uniform Act and Restatement Requirements ................ 5-3§ 5:4 Relationship to Subject Matter ....................................... 5-4§ 5:5 Relationship to Secrecy Requirement.............................. 5-6§ 5:6 Novelty ........................................................................... 5-7§ 5:7 The Relevant Market .................................................... 5-14§ 5:8 Investment.................................................................... 5-15§ 5:9 Exclusion of Intellectual Capital Embodied in

Employees..................................................................... 5-18§ 5:10 Establishing Competitive Advantage ............................ 5-19

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Chapter 6 Wrongful Use: Special Relationships

§ 6:1 Introduction and Overview............................................. 6-2§ 6:2 Uniform Trade Secrets Act, Defend Trade Secrets Act,

and Restatement............................................................. 6-2§ 6:3 Fiduciaries and Trustees ................................................. 6-4§ 6:4 Comparison with Other Legal Relationships.................. 6-6

§ 6:4.1 Other Contractual Relationships ............................ 6-6§ 6:4.2 Other Special Relationships in Tort ........................ 6-7

§ 6:5 Establishment of Relationship ........................................ 6-9§ 6:5.1 Creation Through Express Contract ....................... 6-9

[A] Requirements .......................................................... 6-9[B] Model Language .................................................... 6-17[C] Work Made for Hire Agreements .......................... 6-22

§ 6:5.2 Creation Through Implication.............................. 6-25§ 6:5.3 Implied Duties of Employees ................................ 6-30§ 6:5.4 Implied Duties of Nonemployees ......................... 6-38§ 6:5.5 Express Disclaimers .............................................. 6-48§ 6:5.6 Successorship ........................................................ 6-49

§ 6:6 Scope of Duties............................................................. 6-50§ 6:6.1 Fiduciary Duties in General.................................. 6-50§ 6:6.2 Duties Defined by Contract.................................. 6-53§ 6:6.3 Covenants Not to Compete Distinguished from

Nondisclosure Agreements ................................... 6-55§ 6:6.4 Avoiding Restrictions on Human Capital............. 6-82

§ 6:7 Freedom of Information Act—Special Relationshipwith the Government ................................................... 6-91

§ 6:8 Breach ........................................................................... 6-95§ 6:9 Use of a Trade Secret in Violation of a License

Agreement .................................................................. 6-106§ 6:10 Remedies..................................................................... 6-109

Chapter 7 Wrongful Acquisition or Use by Strangers

§ 7:1 Introduction and Overview............................................. 7-2§ 7:2 Strangers ......................................................................... 7-3§ 7:3 Improper Means ............................................................. 7-4§ 7:4 Electronic Espionage ..................................................... 7-21§ 7:5 Wrongful Acquisition .................................................... 7-24§ 7:6 Wrongful Use ................................................................ 7-27§ 7:7 Wrongful Disclosure ..................................................... 7-36§ 7:8 Comparison with Intentional Interference with

Contractual Relationships ............................................ 7-37

(Perritt, Rel. #12, 7/17)

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§ 7:8.1 Elements of the Tort ............................................. 7-37§ 7:8.2 Inducing Violation of Special Relationship ........... 7-44

§ 7:9 Duty Arising from Notice of Trade Secret Status ......... 7-45§ 7:9.1 Example of Liability for Use of Accidentally

Disclosed Trade Secret .......................................... 7-46§ 7:9.2 Role of Notice As a Source of Fault ...................... 7-47§ 7:9.3 Scope of Notice ..................................................... 7-49§ 7:9.4 Effect of a Material Change in Position................ 7-50§ 7:9.5 Continued Use After Notice Received .................. 7-51§ 7:9.6 Extension to Other Forms of Confidential

Information........................................................... 7-53§ 7:10 Use by One Who Knows the Secret.............................. 7-54§ 7:11 Proper or Privileged Means ........................................... 7-58

§ 7:11.1 UTSA Examples.................................................... 7-58§ 7:11.2 Reverse Engineering .............................................. 7-59

§ 7:12 Government Taking...................................................... 7-61§ 7:13 Liability of Corporate Shareholders and Directors........ 7-62

Chapter 8 Defenses

§ 8:1 Introduction and Overview............................................. 8-1§ 8:2 Negating the Prima Facie Case....................................... 8-2§ 8:3 Affirmative Defenses....................................................... 8-3

§ 8:3.1 Independent Development...................................... 8-5§ 8:3.2 First Amendment.................................................... 8-5§ 8:3.3 Joint Ownership...................................................... 8-8§ 8:3.4 Shop Right Defense ................................................ 8-8

§ 8:4 Relationship Between Antitrust and PreemptionDefenses ......................................................................... 8-8

§ 8:5 Antitrust Defense ......................................................... 8-10§ 8:5.1 Trade Secret Contracts As Restraints of Trade...... 8-11§ 8:5.2 Other Anticompetitive Conduct by Trade

Secret Owner......................................................... 8-14§ 8:5.3 Unclean Hands Defense ....................................... 8-21§ 8:5.4 Trade Secret Misappropriation As Antitrust

Violation ............................................................... 8-21§ 8:6 Preemption As a Defense ............................................. 8-22

§ 8:6.1 Federal Objectives ................................................. 8-23§ 8:6.2 Patent Preemption ................................................ 8-27§ 8:6.3 Preemption Under Section 301 of the 1976

Copyright Act: Basic Concepts ............................. 8-32§ 8:6.4 Case Law on Copyright Preemption of

Trade Secret Claims .............................................. 8-40§ 8:6.5 Practical Analysis of Preemption .......................... 8-56

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§ 8:6.6 Removal to Federal Court ..................................... 8-57§ 8:7 Sovereign Immunity ..................................................... 8-57

§ 8:7.1 Federal Tort Claims Act........................................ 8-58

Chapter 9 Transferring Rights

§ 9:1 Introduction and Overview............................................. 9-1§ 9:1.1 Who Owns the Trade Secret?.................................. 9-2

§ 9:2 Analogies to Future Interests.......................................... 9-3§ 9:3 Formalities for Transfer .................................................. 9-9§ 9:4 Transfers of Entire Interest ........................................... 9-10§ 9:5 Limiting Competition by Transferor............................. 9-12§ 9:6 Limiting Scope of Use by Transferee ............................ 9-14§ 9:7 Fraudulent Inducement to Transfer Trade Secret.......... 9-15§ 9:8 Justice Department Guidelines on License

Restrictions ................................................................... 9-16§ 9:9 Pledging Trade Secrets As Security for Loan................. 9-20

§ 9:9.1 Relevant Provisions of U.C.C. Article 9 ............... 9-20[A] Trade Secrets As Personal Property Governed by

Article 9 ................................................................ 9-20[B] Security Agreements ............................................. 9-22[C] Perfection of the Security Interest:

The Financing Statement ..................................... 9-25[D] Sale of Collateral by Secured Party After

Default .................................................................. 9-26§ 9:9.2 Hypothetical Lending Transaction ........................ 9-26

[A] Disclosure of Trade Secret in LoanDocumentation..................................................... 9-27

[B] Post-Default Repossession and Sale of theTrade Secret........................................................... 9-28

[C] Sale of the Trade Secret......................................... 9-28[D] Prevention of Trade Secret Misappropriation........ 9-30

§ 9:10 Covenant Not to Compete—Assignability ................... 9-32§ 9:11 Distribution of Trade Secrets As Marital Property........ 9-33§ 9:12 Taxation........................................................................ 9-33§ 9:13 Royalty Agreements ...................................................... 9-34

Chapter 10 Litigation

§ 10:1 Introduction.................................................................. 10-2§ 10:2 Subject Matter Jurisdiction ........................................... 10-3§ 10:3 Parties ........................................................................... 10-9

§ 10:3.1 Vicarious Liability ................................................. 10-9

(Perritt, Rel. #12, 7/17)

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xvii

§ 10:3.2 Individual Defendants........................................... 10-9§ 10:3.3 Business Enterprises ........................................... 10-10

§ 10:4 Personal Jurisdiction ................................................... 10-10§ 10:5 Forum Selection Clauses ............................................ 10-52§ 10:6 Immunity ................................................................... 10-62§ 10:7 Statutes of Limitation................................................. 10-62

§ 10:7.1 Determining Applicable Statute ofLimitations........................................................... 10-63

§ 10:7.2 Commencement of Limitations Period............... 10-63§ 10:7.3 Continuing Tort or Single Cause of Action ........ 10-65

[A] Continuing Tort View ......................................... 10-66[B] Single Cause of Action View............................... 10-68

§ 10:7.4 Discovery Rule .................................................... 10-74§ 10:7.5 Actual Damages Rule.......................................... 10-75

§ 10:8 Choice of Law............................................................. 10-76§ 10:9 Pleading ...................................................................... 10-90

§ 10:9.1 Identifying the Trade Secret with Specificity....... 10-95§ 10:9.2 Compulsory Counterclaims.............................. 10-100

§ 10:10 Discovery .................................................................. 10-100§ 10:10.1 Types of Discovery ............................................ 10-104§ 10:10.2 Discovery Tactics .............................................. 10-111§ 10:10.3 Discovery Scope ................................................ 10-114§ 10:10.4 Discovery Management .................................... 10-119§ 10:10.5 Use of Discovery Evidence at Trial ................... 10-125§ 10:10.6 Protecting Discovery Information from

Disclosure ......................................................... 10-127§ 10:10.7 Preventing Disclosure of Trade Secrets in

Non-Trade-Secret Litigation .............................. 10-138§ 10:10.8 Protecting Trade Secrets from Disclosure

Under Other Laws ............................................ 10-143§ 10:10.9 Sample Discovery Confidentiality Order .......... 10-163§ 10:10.10 Discovery Sanctions.......................................... 10-167§ 10:10.11 Appealability of Discovery Orders..................... 10-168§ 10:10.12 Sample Discovery Plan ..................................... 10-170§ 10:10.13 Discovery of Expert Opinions ........................... 10-179§ 10:10.14 Electronic Discovery ......................................... 10-180

[A] Basic Requirements........................................... 10-181[B] Litigation Holds and Duty to Preserve

Information....................................................... 10-185[C] Planning............................................................ 10-187[D] Specifying Systems and Individuals .................. 10-190[E] Predictive Coding.............................................. 10-191[F] Discovery Management Orders......................... 10-192[G] Specific Issues ................................................... 10-195

TRADE SECRETS

xviii

[G][1] Direct Access.................................................... 10-195[G][2] Metadata and Native Formats.......................... 10-195[G][3] Privilege Review................................................ 10-197[H] Cloud Computing ............................................. 10-198[I] Costs................................................................. 10-198

§ 10:11 Summary Judgment.................................................. 10-200§ 10:12 Insurance .................................................................. 10-203§ 10:13 Discharge in Bankruptcy .......................................... 10-203

Chapter 11 Settling Disputes

§ 11:1 Introduction and Overview........................................... 11-1§ 11:2 Legal Status of Settlement Agreements ........................ 11-2

§ 11:2.1 Before Lawsuit Is Filed.......................................... 11-2§ 11:2.2 After Lawsuit Is Filed............................................ 11-3

§ 11:3 Estoppel ........................................................................ 11-4§ 11:4 Examples of Settlement Agreements ............................ 11-4

§ 11:4.1 Settlement and Release Agreement No. 1............. 11-5§ 11:4.2 Stipulated Dismissal, Filing Settlement

Agreement............................................................. 11-8§ 11:4.3 Stipulation and Order Terminating Action......... 11-10§ 11:4.4 Release No. 2 ...................................................... 11-11§ 11:4.5 Release No. 3 ...................................................... 11-11§ 11:4.6 Settlement and Nondisclosure Agreement.......... 11-12§ 11:4.7 Agreement 4 ....................................................... 11-16§ 11:4.8 Accompanying Complaint .................................. 11-19§ 11:4.9 Settlement Agreement and Consent Decree ....... 11-28§ 11:4.10 Settlement Agreement and Consent

Decree No. 5....................................................... 11-29§ 11:4.11 Settlement Agreement No. 6 .............................. 11-30§ 11:4.12 Settlement Agreement No. 7 .............................. 11-31§ 11:4.13 Release Providing for Royalty Payments ............. 11-31§ 11:4.14 Consent Judgment .............................................. 11-32§ 11:4.15 Oral Settlement on the Record ........................... 11-33

§ 11:5 Negotiation ................................................................. 11-34§ 11:6 Arbitration .................................................................. 11-35§ 11:7 Mediation ................................................................... 11-49§ 11:8 Cease-and-Desist Letters ............................................ 11-49

Chapter 12 Trial

§ 12:1 Introduction and Overview........................................... 12-2§ 12:2 Pretrial Conferences and Orders................................... 12-2§ 12:3 Pretrial Motions and Delay .......................................... 12-4

(Perritt, Rel. #12, 7/17)

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§ 12:4 Trial Plan ...................................................................... 12-5§ 12:5 Opening Statements ..................................................... 12-7§ 12:6 Proof ............................................................................. 12-8

§ 12:6.1 Relevancy .............................................................. 12-9§ 12:6.2 Repetition and Cumulative Evidence.................... 12-9§ 12:6.3 Leading Questions ................................................ 12-9§ 12:6.4 Compound Questions......................................... 12-10§ 12:6.5 Narrative Testimony ........................................... 12-10§ 12:6.6 Interrogation by Judge......................................... 12-10§ 12:6.7 Impeachment ...................................................... 12-10§ 12:6.8 Exclusion of Witnesses ....................................... 12-11§ 12:6.9 Hearsay ............................................................... 12-11§ 12:6.10 Best Evidence Rule .............................................. 12-14§ 12:6.11 Parol Evidence Rule............................................. 12-14§ 12:6.12 Exclusionary Rules .............................................. 12-15

§ 12:7 Motions in Limine...................................................... 12-16§ 12:8 Expert Witnesses......................................................... 12-18

§ 12:8.1 Scope of Testimony ............................................. 12-19§ 12:8.2 Qualifications...................................................... 12-21§ 12:8.3 Judge’s Power to Call .......................................... 12-22§ 12:8.4 Foundation for Expert Testimony ....................... 12-23

§ 12:9 Preserving Secrecy....................................................... 12-23§ 12:9.1 Sealed Opinions .................................................. 12-28

§ 12:10 Closing Arguments ..................................................... 12-29§ 12:11 Jury Trials ................................................................... 12-29

§ 12:11.1 Availability .......................................................... 12-29§ 12:11.2 Jury Instructions ................................................. 12-33§ 12:11.3 Jury Special Verdicts and Jury Interrogatories..... 12-35

§ 12:12 Trial Practice Trends ................................................... 12-37§ 12:13 Post-Trial Relief........................................................... 12-38§ 12:14 Stays ........................................................................... 12-41§ 12:15 Preclusion ................................................................... 12-42§ 12:16 Recognition of Foreign-State Judgments ..................... 12-49

Chapter 13 Remedies

§ 13:1 Introduction and Overview........................................... 13-2§ 13:2 Injunctions ................................................................... 13-2

§ 13:2.1 Equitable Jurisdiction............................................ 13-3§ 13:2.2 Stipulated Injunctions........................................... 13-6§ 13:2.3 Interlocutory Injunctions ...................................... 13-7

[A] Generally............................................................... 13-7[B] Irreparable Injury ................................................ 13-11[C] Relative Hardships .............................................. 13-14

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[D] Probability of Success on the Merits................... 13-18[E] Bond Requirement .............................................. 13-20[F] Differences Between TROs and Preliminary

Injunctions.......................................................... 13-21[G] Personal Service of Interlocutory Injunctions ..... 13-24

§ 13:2.4 Scope of Injunctive Relief: Prohibited Conduct.... 13-28§ 13:2.5 Scope of Injunctive Relief: Duration ................... 13-37§ 13:2.6 Text of a Preliminary Injunction......................... 13-49§ 13:2.7 Contempt............................................................ 13-51§ 13:2.8 Sanctions for Wrongfully Obtaining Injunctions

and Other Extraordinary Relief ........................... 13-56§ 13:3 Damages ..................................................................... 13-57

§ 13:3.1 Restitutionary Valuation ..................................... 13-70§ 13:3.2 Royalty Basis....................................................... 13-75§ 13:3.3 Unjust Enrichment ............................................. 13-86§ 13:3.4 Punitive Damages ............................................... 13-90§ 13:3.5 Allocation of Damages........................................ 13-92

§ 13:4 Sanctions for Bad-Faith Claims .................................. 13-94§ 13:5 Hypothetical Case Illustrating Compensatory

Damages, Restitution-Based Relief, PunitiveDamages, and Attorneys’ Fees .................................... 13-98

§ 13:6 Constructive Trust...................................................... 13-99§ 13:7 Searches and Seizures ............................................... 13-104§ 13:8 Malicious Prosecution .............................................. 13-111§ 13:9 Criminal Penalties .................................................... 13-111§ 13:10 Economic Espionage Act........................................... 13-117§ 13:11 Civil Seizure ............................................................. 13-134§ 13:12 Incarceration............................................................. 13-138§ 13:13 Bankruptcy................................................................ 13-143

Chapter 14 International Disputes

§ 14:1 Introduction and Overview........................................... 14-2§ 14:2 Hypothetical Case......................................................... 14-3§ 14:3 Analytical Framework and Checklist............................ 14-4§ 14:4 Sources of Law.............................................................. 14-5

§ 14:4.1 Public International Law Versus PrivateInternational Law ................................................. 14-5

§ 14:4.2 GATT TRIPs......................................................... 14-7§ 14:4.3 European Community .......................................... 14-7§ 14:4.4 European Community Institutions....................... 14-9§ 14:4.5 European Trade Secrets Law ............................... 14-13§ 14:4.6 Canada................................................................ 14-13§ 14:4.7 Mexico ................................................................ 14-14

(Perritt, Rel. #12, 7/17)

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§ 14:4.8 Japan ................................................................... 14-14§ 14:4.9 China .................................................................. 14-15§ 14:4.10 Human Rights Convention................................. 14-16

§ 14:5 Competition Regulation ............................................. 14-18§ 14:6 Procedural Influence of Civil Law Tradition ............... 14-20§ 14:7 Jurisdiction ................................................................. 14-21

§ 14:7.1 Choice of Law and Personal Jurisdiction ............ 14-24§ 14:7.2 Service of Process ................................................ 14-26§ 14:7.3 Parallel Proceedings in U.S. and Foreign

Courts ............................................................... 14-33§ 14:7.4 Protecting Jurisdiction ........................................ 14-42

§ 14:8 Foreign Discovery ....................................................... 14-44§ 14:9 Choice of Law............................................................. 14-56

§ 14:9.1 Determining Foreign Law ................................... 14-57§ 14:9.2 Determining the Substantive Reach of

Domestic Law ..................................................... 14-58§ 14:10 Recognition and Enforcement of Judgments............... 14-59§ 14:11 Exclusion and Forfeiture of Imported Articles

Involving Misappropriated Trade Secrets .................... 14-67§ 14:12 International Arbitration ............................................ 14-69

Table of Authorities ................................................................ T-1

Index ...........................................................................................I-1

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