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The Defend Trade Secrets Act 2016, a Strong Argument to Mediate IP Disputes

Disclaimer: This article does not constitute legal advice. If you have any questions about your individual situation it is best to seek the advice of an experienced legal professional.

When it comes to intellectual property, it’s almost impossible to put a price on the “secret sauce” that is a company’s lifeblood. Litigation can compensate for losses, but settling a case through mediation should be considered in any trade secret dispute. Mediation privacy is the obvious reason to choose this option, but it is only one reason amongst many. There are plenty of other reasons, including reasons that lie within the provisions of the Uniform Trade Secrets Act and the recent Defend Trade Secrets Act (2016) themselves.

If you’ve carefully examined the issues that make your trade secret dispute different, then it may be time to consider what dispute resolution mechanism would suit best. Some of the many reasons mediation may be suited to trade secret disputes include:

    When trade secret disputes are as complex and technical as patent disputes, a neutral can be very helpful in providing an expert analysis of the facts. Neutrals can be chosen with a specific area of expertise.
    Companies may want to fine tune their trade secret policies with in-house counsel (especially since the introduction of the Defend Trade Secrets Act), but a mediator may also be a good option to go beyond the fine print and facilitate education in the company about what is protected.
    Mediation may also be useful in facilitating agreements that wouldn’t happen through litigation, such as two companies agreeing to merge.
    The Defend Trade Secrets Act has a three year statute of limitations. Sometimes theft of intellectual property or customer information may take a while to surface, in which case mediation can help to contain the problem after the statute of limitations has passed.
    The DTSA has new whistle-blowing terms that should be taken into consideration when litigation is on the table. If employers do not update their agreements to include these whistle-blowing terms, any employer making a DTSA claim can’t recover attorney’s fees or exemplary damages. Mediation can help to identify these weaknesses before going to trial, or offer a more secure alternative than litigation.
    Fee shifting is a possibility under both the California Uniform Trade Secrets Act and the federal DTSA: if a party has been found to have willfully and maliciously misappropriated a trade secret, attorneys’ fees and exemplary damages of twice the actual damages will be awarded against the party. On the other hand, attorneys’ fees may be awarded to the other party if the claim of misappropriation is made in bad faith.

At Boileau Conflict Solutions, we are committed to finding resolutions to even the most complex disputes. We are well-educated mediators and negotiators who can leverage our legal and financial backgrounds to implement mathematical, financial and psychological strategies to quantify all interests and move towards the best resolution. We are available for consultation, deal mediation and mediation of any business dispute. We are available to mediate at all stages of a business relationship or transaction, from entering into a deal, preliminary negotiations to ending a transaction or deal. Please contact us to see how we can help or visit us at our offices in Campbell, CA, Irvine, CA or Boulder, CO.

Disclaimer: This article does not constitute legal advice. If you have any questions about your individual situation it is best to seek the advice of an experienced legal professional.

Further reading on this topic:

https://www.law360.com/articles/806201/what-you-should-know-about-the-defend-trade-secrets-act

http://www.callawyer.com/2016/10/trade-secret-cases-is-adr-the-secret-ingredient-for-resolution/

http://www.callawyer.com/2016/10/trade-secret-cases-is-adr-the-secret-ingredient-for-resolution/

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