A plaintiff going to trial on a technology-based trade secrets misappropriation claim is in a tough spot. On the one hand, the plaintiff wants to preserve confidentiality of the asserted trade secrets, so as to maintain an advantage over competitors. For its part, the defendant may also want to ensure confidentiality of its technology, which it may claim was independently developed without use of the plaintiff’s trade secrets.
On the other hand, the plaintiff must prove misappropriation, which requires explaining the trade secrets to the factfinder (a jury or judge). Similarly, to defend against a trade secrets claim, the defendant may have to discuss its own technology with the factfinder. These explanations likely will need to be very specific, thus potentially exposing highly-sensitive technology to the world.
One possible solution to resolve these competing interests is to close the courtroom for the entire trial. But as held by the California Supreme Court and lower federal courts, the public has a presumptive First Amendment right to observe civil trials. KNBC-TV v. Superior Court,20 Cal. 4th 1178, 1217-1218 (1999) (“KNBC”); Gerawan Farming, Inc. v. Agricultural Labor Relations Bd., 40 Cal. App. 5th 241, 260 (2019) [collecting federal cases]. Closing the courtroom for the entire trial likely would be unconstitutional.
Another possibility would be to try the case without taking any special precautions to protect trade secrets. But discussing trade secrets in a public courtroom without taking reasonable measures to protect them may well destroy their confidential status. See Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 848-49 (10th Cir. 1993).
So as an attorney preparing for a trade secrets trial, what should you do? In my view, you should do two things. First, make an adequate evidentiary record to justify special precautions (e.g., closing the courtroom for brief periods). Second, talk with opposing counsel and the trial judge early and often to develop a trial plan addressing trade secret issues in a practical way.
Let’s look at each of these points in more detail
I. Provide Evidence to Overcome the Presumption of Public Access.
To overcome the constitutional presumption of an open courtroom, a party needs to provide evidence to a judge that closing the proceeding to the public preserves a “higher interest” and that the closure is narrowly tailored to serve that interest. If it does so, the courtroom can be closed, at least for portions of the trial. See KNBC, supra, 20 Cal. 4th at pp. 1217-1218. The judge needs to make express findings on the record reflecting these factors. See id.
In trade secret cases, that “higher interest” would be preserving confidentiality of the alleged trade secret. Cal. R. Ct. 2.550, advisory committee comment. In fact, California law specifically requires a judge to “maintain the secrecy of an alleged trade secret through reasonable means.” Cal. Civ. Code, § 3426.5.
It is not necessary for a plaintiff to prove that the alleged trade secret is, in fact, a trade secret, before seeking an in-camera hearing or a closed courtroom. See Cal. Civ. Code, § 3426.5. But the plaintiff does have to show that, at the time of trial or hearing, the alleged trade secret is still confidential, so as to justify closure.
Typically, a plaintiff presents a declaration from a high-ranking scientific/technical officer explaining: a) how the technical or other information at issue meets the criteria for being a trade secret; and b) why closing the courtroom during specific discussions of the trade secrets is the only reasonable way to protect the secrets and prevent competitive harm. The more relevant details the declarant provides, the more likely it is a judge will accept the declarant’s views and close the courtroom.
II. Practical Tips for Your Trial Plan
Once it is plain that your trade secrets case is going to trial, begin talking with opposing counsel about how the plaintiff’s alleged trade secrets (and the defendant’s confidential technology) will be presented at trial, when the courtroom will need to be closed, and related issues. You should try, if possible, to develop a joint draft trial plan addressing these issues.
Once you have a draft trial plan, discuss it with the judge, since she will be the one ultimately approving it. Often, these trade secret presentation issues are discussed at the final pretrial conference. In my experience, it is better to discuss these issues with the judge earlier than that because of: a) the findings that must be made before any courtroom closure occurs; and b) the unusual arrangements that may need to occur at trial.
Here are some ideas of what the parties could put in their joint trial plan and discuss with the judge:
- If you believe that the courtroom needs to be closed for part of the trial, ask the judge to make express findings on the record justifying closure. Accord Cal. Rule of Court 2.550 [listing analogous factors considered when sealing documents]. Without explicitly making the required findings, the judge legally cannot close the courtroom.
- Show the judge how the alleged trade secret is still a secret today, as opposed to when the supposed misappropriation occurred. Many trade secret cases involve misappropriation of information that was confidential at the time of theft, but now is public (because it was in a patent or other public disclosure). There may well be viable claims in those cases, but there’s no need to close the courtroom in those cases, since the information at issue already is in the public domain.
- Don’t ask the judge to close the entire trial, or even most of the trial. Typically, relatively little of the trial will involve testimony or documents discussing the alleged trade secrets in detail. That’s the only portion you should try to protect from the public. Seeking a blanket closure of the courtroom may well backfire and cause the whole trial to be open. In other words, be narrow in your request.
- Ensure there is adequate public notice of the potential closure. See KNBC, supra, 20 Cal. 4th at p. 1217; United States v. Valenti, 987 F.2d 708, 713 (11th Cir. 1993). This notice occurs when a judge announces in open court “he or she plans to hold (or to consider holding) that proceeding in closed session,” or when a party files a motion to close the courtroom “reasonably in advance of a determination thereon.” KNBC, supra, 20 Cal. 4th at p. 1217.
- Have all parties and the judge agree to limit on-the-record discussions of specific trade secrets, unless absolutely necessary. You can instruct witnesses to speak about “Trade Secret #4” or the information in “Trial Exhibit 50,” for instance, instead of providing unnecessary detail about the trade secret.
- Have the judge order that witness testimony be broken into two parts: regular testimony open to the public and detailed trade secret testimony closed to the public. There would be direct, cross, and redirect examination for the regular testimony. The judge would then close the courtroom after making the required findings on the record. Then there would be direct, cross, and redirect examination limited to trade secret details. Finally, the judge would reopen the courtroom for the next witness.
This process can be cumbersome, but it does limit the closure of the courtroom, as required by the First Amendment. And it has the side benefit (at least for plaintiffs) of showing the jury that the information to be discussed in closed session is highly important—and thus perhaps worthy of protection. For their part, defendants usually ask judges for a jury instruction explaining that closing the courtroom to discuss certain technical information does not mean the information necessarily is a trade secret.
- Tell the judge that when the courtroom is closed, you and opposing counsel will ensure that no unauthorized individuals are in the courtroom. After all, the judge may not know who is an “authorized individual.” Then at trial, you should make a record that the courtroom has been properly cleared. That way, there will be no dispute down the road whether you took reasonable measures to protect the trade secrets or other highly-confidential information.
- If the courtroom is not closed when highly-confidential trial exhibits are being discussed, have the jury see these trial exhibits, but not the spectators in the courtroom. One way to do that is to set up individual video screens for jurors, and show these trial exhibits to the jurors, while making sure people in the public gallery cannot see those screens. Make sure before trial that the judge is comfortable with this arrangement.
- Alert the judge that you will file motions to seal transcripts of closed courtroom testimony and sensitive trial exhibits. And then gently nudge the judge during trial to rule on them; in the heat of trial, these motions sometimes can go by the wayside.
IV. Conclusion
If you follow the principles and tips discussed above, presenting and protecting trade secrets and highly-confidential material at trial should go smoothly. Whether you succeed at trial . . . well, that’s a different story!
The Hon. Sunil R. Kulkarni is a judge on the Santa Clara County Superior Court. He currently has a Complex Civil Litigation assignment, and has tried multiple cases involving trade secrets or highly-confidential information