Trade Secret Mediation: Negotiating Beyond the Distrust, Part II of II

Trade Secret Mediation: Negotiating Beyond the Distrust, Part II of II-0

Trade Secret Mediation: Negotiating Beyond the Distrust, Part II of II

Written by Erica B., OLN Freelance Attorney.

Continued from Part I here.

Conduct a Thorough Investigation The First Time Around.  Counsel (both in-house and outside law firm) who do not have experience with trade secret disputes or who are not familiar with the internal workings of computer software, networks, IT departments and staff, should promptly seek the advice of trade secret counsel or a consultant.  This will help to ensure that employees and contractors are properly instructed on how to search internal systems/networks; to conduct successful witness interviews by asking the right questions; to ensure the investigation is complete so there are no surprises later on; and to avoid spoliation of evidence.  An incomplete or faulty investigation, especially if discovered during the mediation, may raise suspicions and require the session to be suspended so that a supplemental investigation can be performed, resulting in increased time, expense and frustration for all involved.

Accept That You May Never Get All the Answers.  Trade secret cases often involve a substantive investigation into a party’s computers, networks, systems and personnel to discover if trade secrets have been wrongfully misappropriated.  Depending on the manner in which systems and software are configured, whether company policies are/were in place and the availability and reliability of witnesses, it may not be possible to develop a full picture of whether misappropriation has actually occurred.  There usually comes a time when counsel and client must accept this fact, and decisions must be made based on the information available at that moment.  It may not be worth the effort and expense to continue an investigation or conduct additional discovery.  The difficulty is knowing when to “stop,” and convincing the client to do the same.  Emotions and distrust may impede a party’s ability to think clearly and make a rational decision on the matter, but it must be done, especially when it is in the best interest of the client to reach a settlement during the mediation session.

Make Sure Expert Reports are Easy to Understand. Sometimes a party will introduce an expert’s forensic computer report during the mediation for the participants to review.  Reports such as these are extremely helpful in determining what information resided in the defendant’s computer system, and whether that information constituted plaintiff’s trade secrets.  On occasion, the expert’s report is such a maze of jumbled, unintelligible graphs, charts, data and technical speak that it requires an instructional manual.  Explaining difficult reports during mediation can waste precious time that could be better used for settlement discussions.  Counsel should make sure the graphs, charts, legends and data in expert reports are clear and easy to understand; the explanatory text is written in layman’s terms, not industry speak; and the results and implications are clear.  Simple expert reports will minimize the time spent reviewing and explaining the report, and maximize the time spent on negotiating settlement terms.

Parties to a trade secret dispute may experience distrust, incomplete information and a lack of communication and cooperation.  This can set the tone of the mediation session, impede the parties’ willingness to cooperate and reduce the likelihood of reaching settlement.  Overcoming these obstacles can be an uphill battle for the parties and the mediator.  These obstacles can be overcome by working through, and in spite of, a lack of trust and incomplete information; finding areas of cooperation and trust; keeping the lines of communication open; and working in the client’s best interest to resolve the dispute so that the client can get “back to business.”  Counsel and clients must commit to the process in order to overcome the barriers to settlement and achieve success in trade secret mediation.

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