Florida Business Litigation Lawyer Blog
In business litigation over alleged misappropriation of trade secrets, parties frequently dispute the legal requirement that the allegedly misappropriated trade secrets be disclosed with “reasonable particularity.” Florida and federal courts generally hold that when a plaintiff asks the court to find that trade secrets exist and that the defendant misappropriated those trade secrets, the plaintiff must reveal the information it ultimately seeks to protect. Peter Mavrick is a Fort Lauderdale trade secret attorney, and also represents clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in business litigation, non-compete agreement litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.
Because lawsuits alleging trade secret misappropriation are often between business competitors, it is understandable that the plaintiff business does not want the defendant business rival to understand the full scope of the misappropriated trade secret. However, Florida and Federal courts require disclosure of the relevant trade secrets to the defendant, with “reasonable particularity,” because the defendant will need to know this information to have a fair ability to defend against the lawsuit. For example, in Bestechnologies, Inc. v. Trident Environmental System, Inc., 681 So.2d 1175 (Fla. 2d DCA 1996), the Florida appellate court in a trade secrets misappropriation case denied a petition to vacate, i.e., overturn, an order compelling deposition testimony. In the course of the business litigation, the rival business sought to obtain evidence that the plaintiff business’ processes were not trade secrets, but rather, were common processes known throughout the industry. The Judge in the trial court had ordered the plaintiff business to produce to the defendant discovery related to this issue, but the Judge ordered that the discovery must remain confidential. The appellate court held that the defendants were allowed to know whether the plaintiff’s competitors were aware of the plaintiff’s processing techniques, so long as the trial court took measures to protect the alleged trade secrets.
Sometimes plaintiffs suing for trade secrets misappropriation resist disclosing trade secrets information on the grounds that the information is privileged as a trade secret Florida has a statutory trade secrets privilege set forth in § 90.506, Florida Statutes. Florida’s Fourth District Court of Appeal, i.e., the appellate court governing Broward County, Florida, has held that “[w]hen the trade secret privilege is asserted as the basis for resisting production, the trial court must determine whether the requested information constitutes a trade secret; if so, the court must require the party seeking production to show reasonable necessity for the requested materials.” American Express Travel Related Svcs., Inc. v. Cruz, 761 So.2d 1206 (Fla. 4th DCA 2000). The appellate court explained that “[t]he burden is on the party resisting discovery to show ‘good cause’ for protecting or limiting discovery by demonstrating that the information sought is a trade secret or confidential business information and that disclosure may be harmful.” However, a plaintiff who sues for trade secrets misappropriation will generally waive the right to assert the trade secrets privilege. In Del Monte Fresh Produce Company v. Dole Food Company, Inc., 14 F.Supp.2d 1332 (S.D. Fla.), the United States District Court for the Southern District of Florida explained that “[t]he common factor in all of the trade secret privilege cases is that the parties opposing production have asserted the privilege because they claim that the trade secrets re not at issue in their cases. In the instant case, the opposite is true … [because] the trade secrets are the ultimate issue to be decided by the court. By bringing a claim under the Uniform Trade Secrets Act, and thereby placing the trade secrets at issue, Del Monte essentially waived its right to assert the trade secrets privilege.” Fundamentally, the trade secrets privilege does not apply in cases where the primary questions to be resolved are whether a trade secret exists and whether it was misappropriated.
While defendants in trade secrets litigation have a right to understand the trade secret relevant to the lawsuit, the actual trade secrets do not need to be detailed in the complaint filed with the court. Some business litigation defendants have argued the trade secrets complaint must be dismissed because the plaintiff business did not detail the trade secrets in the complaint. Courts generally will not dismiss complaints in that situation because doing so would undermine the purpose of trade secrets law to protect legitimate trade secrets. Instead, the appropriate details of the trade secrets should be disclosed in discovery pursuant to a confidentiality order of the court. As one federal court has explained, “the idea that a plaintiff must disclose detailed descriptions of trade secrets in a public complaint—including, according to Defendant, pricing data and specific client names—without any protective order in place would likely defeat the entire purpose of attempting to protect those trade secrets in the first place.” Digital Assurance Certification, LLC v. Pendolino, 2017 WL 10084904 (M.D. Fla. 2017).
Peter Mavrick is a Fort Lauderdale trade secret lawyer who also practices trade secret litigation in Palm Beach, Boca Raton, and Miami-Dade. This article does not serve as a substitute for legal advice tailored to a particular situation.