FOLEY.COM
December 4, 2023
Trade Secrets: Best
Practices and
Enforcement
Presenters
2
Chris King
Partner | Milwaukee
T: 414.297.5553
Carmen Decot
Partner | Milwaukee
T: 414.297.5568
Nicholas Zepnick
Partner | Milwaukee
T: 414.319.7121
Overview
Statutory Overview
Trade Secret Governance
Trade Secret Security Examples
Take Away
3
What is a Trade Secret?
(1) Information that the owner has
taken reasonable measures to keep
secret; and (2) that has
independent economic value from
not being generally known
Rights in trade secrets are provided
under both federal and state law
4
Wis. Stat. § 134.90(1)(c) (Uniform Trade
Secrets Act)
Trade secret means information, including a formula, pattern, compilation, program,
device, method, technique, or process to which all of the following apply:
1. The information derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use
2. The information is the subject of efforts to maintain its secrecy that are reasonable
under the circumstances
5
18 U.S.C. § 1839(3)
“[T]rade secret” means all forms and types of financial, business, scientific, technical,
economic, or engineering information, including patterns, plans, compilations, program
devices, formulas, designs, prototypes, methods, techniques, processes, procedures,
programs, or codes, whether tangible or intangible, and whether or how stored, compiled,
or memorialized physically, electronically, graphically, photographically, or in writing if —
A. The owner thereof has taken reasonable measures to keep such information secret;
and
B. The information derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable through proper means
by, another person who can obtain economic value from the disclosure or use of the
information
6
Cause of Action: Wis. Stat. § 134.90(2)(b)
Trade Secrets are Misappropriated, not Infringed
No person…may misappropriate or threaten to misappropriate a trade secret by
A. Acquiring the trade secret of another by means that the person knows or has reason to know
constitutes improper means.
B. Disclosing or using without express or implied consent a trade secret of another if the person
1. Used improper means to acquire knowledge of the trade secret or
2. At the time of disclosure or use, knew or had reason to know that he or she obtained
knowledge of the trade secret by (a) Deriving it from or through a person who utilized
improper means to acquire it; (b) Acquiring it under the circumstances giving rise to a duty
to maintain its secrecy or limit its use; (c) Deriving it from or through a person who owed a
duty to the person seeking relief to maintain its secrecy or limit its use; or (d) Acquiring it by
accident or mistake.
7
Trade Secret Governance
Identify Opportunities for Trade Secrets
– Specific technologies for patent or trade secret
– General categories of confidential information
Name Responsible Stakeholders
Document Trade Secrets and Storage Locations
Controls – evidencing that secrecy measures are “reasonable”
– Procedures and policies limiting access and use
– Training
– Audit
– Remedies, including discipline and enforcement
8
Sales
HR
Operations
Legal
Who is Responsible for Trade Secrets?
9
• Onboarding
• Training
• Exit interviews
• Electronic records storage
• Controlling access
• Monitoring and auditing access
• Customer lists
• Pricing
• Rumor mill (new product
launch by a competitor after a
former employee joined them)
• Communication
• Training
• NDA and other Contracts
• IP process
• Training
• Innovations
• Limited Access Facilities
• Rumor mill (new product
launch by a competitor after a
former employee joined them)
• Limited Access
Facilities
• Unique
Processes
HR
IT
Senior
Leadership
Engineering/
R&D
Trade
Secrets
Specific Asset: Identify and Protect
10
Invention
Disclosure
Review
Committee
Patent Application
Trade
Secret
Summary &
Explanation
General Categories: Identify and
Stakeholders
Categories (examples)
– Software
Source code, documentation
– Technology reports
Test results, lab notebooks, new product
development reporting
– Commercial know-how
Customer lists, vendor lists, pricing
– Manufacturing processes
Standard operating procedures, quality
procedures
– Secret sauce
Recipes, chemical formulas
Stakeholders
– Leader able to direct and enforce
compliance
– Examples
Lead software developer
SVP, research and development
Director of new product development
Chief commercial officer
Facilities managers
11
Trade Secret Controls
Electronic Records
– Limited access
– Ability to Monitor Access
– Ability to Audit Access
– Where are the electronic
records?
Cloud
– Where is the “cloud”?
Local devices
– Marking
Physical Records & Facilities
– Access controls
Locks
Badge access
– Ability to monitor
– Ability to audit
Security cameras
Security guards
– Visitor NDA
– Marking
12
Employees
– Employee NDA
– Confidential Information
Policy
– Onboarding
– Training
– Exit Interviews
Third Parties
– NDA
– Commercial Agreements
How Secure is Confidential Information in
the Office?
Who can see your screen?
What is on your desk?
Who can hear what you are saying?
Do you lock out or log off your computer
when you leave?
Do you lock your drawers when you
leave?
Did you leave anything behind when
hoteling?
13
How Secure is Confidential Information at
Meetings, Trade Shows, Travel, Public Spaces?
Are there nonemployees in the room or
on the call?
– Onsite supplier reps?
Are any notes left on the whiteboard?
Are any handouts left behind?
Who can see into the meeting room or
listen in on call?
Roll call for conference calls or video
conference?
– Who is that random dial-in on Teams?
14
How Secure is Confidential Information in
Email?
Who is included in Reply All?
What information is in the
entire e-mail chain?
Who did you send the
e-mail to?
– Did autocomplete send the
e-mail to the wrong “Jeff”?
15
Real-World Example: How Secure is
Confidential Information?
An NBA player’s agent tweeted
a photo of a contract signing in
front of a whiteboard listing the
team’s targets for possible
trades and free agent signings.
16
USA v. Wang: Timeline of Events
17
March 2016
Wang joins
Apple as an
engineer and
is “disclosed”
into Titan,
Apple’s secret
self-driving car
project. He
becomes tech
lead of
computer
vision
development.
Nov. 2017
Wang secretly
accepts a job
offer to work at
a competing
Chinese
company.
Apr. 16, 2018
On Wang’s
last day at
Apple, Apple
notices that
Wang had
accessed
large amounts
of proprietary
data.
May 2018
Apple
reviewed
access logs
for its sensitive
project
databases and
found Wang
accessed
large volumes
of trade secret
and IP data
before leaving.
June 2018
Law
enforcement
raids Wang’s
CA residence
and seizes
computer
equipment
containing
large quantities
of confidential
data from
Titan, including
the project’s
entire source
code.
June 2018
After telling
authorities he
had no
intention of
traveling,
Wang flees
the country
with a one-
way ticket to
China just
before
midnight.
Apr. 11, 2023
Wang is
indicted for
theft of trade
secrets under
the DTSA in
the Northern
District of
California.
Prevent, Detect, and Address Theft of Trade
Secrets
18
Prevent
Actions to prevent theft:
Access control: Implement strict
access controls to limit the number
of employees that have access to
sensitive content, and use multi-
factor authentication and role-
based access to restrict such
access
Detect
Actions to detect theft:
Monitoring and auditing:
Automatically detect and report
abnormal work activity and file
access behavior
Establish a mechanism for
anonymous reporting of suspected
theft (e.g., phone line, SMS, online
portal, mobile applications)
Strict exit procedures
Address
Actions to address theft:
Establish a cross-department
SWAT team trained to execute a
specific plan to address suspected
theft
Take Aways
Identify & Document Trade Secrets
– Specific Assets
– General Categories
– Responsible Stakeholders
Govern Trade Secrets
– Procedures and Policies
– Training
– Audit
– Remedies, including discipline and enforcement
19
Thank You
Questions?
20
