MIAMI BUSINESS LITIGATION: THE REQUIREMENT TO DISCLOSE IN TRADE SECRET LITIGATION

It is a common mistake in trade secret litigation for the company seeking protection for its trade secrets to fail to explain what trade secrets it wishes to protect. Courts require that plaintiffs describe their trade secret with a certain degree of particularity. Failing to do that can be fatal to trade secret claims. Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

In business litigation alleging trade secret misappropriation, plaintiffs often focus on how a trade secret was misappropriated rather than what was misappropriated. A trade secret case is not like a regular civil theft or other misappropriation case. How a party lost its trade secret is less important than what was taken. Unlike other theft-related torts, “misappropriation” under the Florida Uniform Trade Secret Act also includes circumstances when a party simply possesses the trade secret material. § 688.002(2) (defining trade secrets misappropriation to include possession of the material in certain circumstances). A plaintiff does not merely have to prove that confidential information was stolen, it must also prove that what was stolen qualifies as a trade secret under Florida or federal law. Particularly, trade secret is defined under Florida law as “information, including a formula, pattern, compilation, program, device, method, technique, or process that [d]erives 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; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” § 688.002 (4), Florida Statutes.

Plaintiffs in business litigation asserting theft of a trade secret must be able to show that what was taken is valuable because it is secret. The plaintiff must also show acted reasonably in trying to keep its information secret. A litigant that fails to adequately explain what its trade secret is will inherently fail to prove that what was misappropriated qualifies as a trade secret. “In order to ascertain whether trade secrets exist, the information at issue must be disclosed.” Lovell Farms, Inc. v. Levy, 641 So. 2d 103 (Fla. 3d DCA 1994); Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So. 3d 678 (Fla. 2d DCA 2010) (“The plaintiff must, as a threshold matter, establish that the trade secret exists. To do so, it must disclose the information at issue”). “[I]t is insufficient to describe the trade secrets by generic category, such as the components of the night vision devices to which the alleged trade secrets relate. Rather, [plaintiff] must identify the specific characteristics of each trade secret, such as a particular drawing, process, procedure or cost/pricing data. It must also describe with reasonable particularity all of its trade secrets, including those involving “business methods, know-how, machines, manufacturing process and procedure, marketing information, pricing data, product designs and manufacturing information […].” Knights Armament Co. v. Optical Sys. Tech., Inc., 254 F.R.D. 463, (M.D. Fla. 2008).

There are different degrees of disclosure necessary at various stages of business litigation concerning trade secrets. At the outset of a trade secret case in federal court, “the plaintiff need only allege sufficient facts to plausibly show a trade secret was involved and to give the defendant notice of the material it claims constituted a trade secret.” DynCorp Int’l v. AAR Airlift Group, Inc., 664 Fed. Appx. 844 (11th Cir. 2016). At the discovery stage, the requirement of specificity is heightened. “In trade secret misappropriation cases, a plaintiff is required to identify with reasonable particularity the trade secrets at issue before proceeding with discovery.” AAR Mfg., Inc. v. Matrix Composites, Inc., 98 So. 3d 186 (Fla. 5th DCA 2012). A plaintiff can lose its case by failing to adequately describe a trade secret at trial. “It is not enough to point to broad areas of technology and assert that something there must have been secret and misappropriated. The plaintiff must show concrete secrets.” Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir. 1992) (reversing jury verdict for want of proof of trade secret misappropriation under the Uniform Trade Secret Act which was also adopted by Florida).

A plaintiff risks losing its trade secret case if it does not adequately define what trade secrets it seeks to protect. A plaintiff that is well-versed in the requirements of the Florida Uniform Trade Secret Act can avoid these consequences by carefully describing the trade secrets at issue. Peter Mavrick is a Miami-Dade business litigation attorney who also practices business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.