1. Protecting Trade Secrets in the United States 2007 US / China Legal Exchange (Xian, Beijing, Shanghai) Rex Hockaday, Caterpillar (China) Investment Co., Ltd. 2007 US/China Legal Exchange (Oct 22-26, 2007)

2. Protecting Trade Secrets in the US US Trade Secret Law Enforcing Trade Secret Rights Trade Secrets as Part of Your Business 2007 US/China Legal Exchange (Oct 22-26, 2007)

3. Protecting Trade Secrets in the US US Trade Secret Law Enforcing Trade Secret Rights Trade Secrets as Part of Your Business 2007 US/China Legal Exchange (Oct 22-26, 2007)

4. Protecting Trade Secrets in the US US Trade Secret Law –State Law –Common Law –Federal Law 2007 US/China Legal Exchange (Oct 22-26, 2007)

5. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) –What is a Trade Secret (TS) –Misappropriation of Trade Secrets 2007 US/China Legal Exchange (Oct 22-26, 2007)

6. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) –What is a Trade Secret –Information … –Independent economic value –Not generally known or readily ascertainable –Reasonable efforts to maintain secrecy 2007 US/China Legal Exchange (Oct 22-26, 2007)

7. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) What is a Trade Secret –Information … –Independent economic value –Not generally known or readily ascertainable –Reasonable efforts to maintain secrecy 2007 US/China Legal Exchange (Oct 22-26, 2007) technical & non-technical physical & electronic combinations

8. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) What is a Trade Secret –Information … –Independent economic value –Not generally known or readily ascertainable –Reasonable efforts to maintain secrecy 2007 US/China Legal Exchange (Oct 22-26, 2007) actual or potential to owner and others

9. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) What is a Trade Secret –Information … –Independent economic value –Not generally known or readily ascertainable –Reasonable efforts to maintain secrecy 2007 US/China Legal Exchange (Oct 22-26, 2007) secret not “absolutely” secret

10. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) What is a Trade Secret –Information … –Independent economic value –Not generally known or readily ascertainable –Reasonable efforts to maintain secrecy 2007 US/China Legal Exchange (Oct 22-26, 2007) internal & external secrecy nature & value of information

11. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) Misappropriation of Trade Secrets (TS) –Acquisition of TS and know or have reason to know it was acquired by improper means, or 2007 US/China Legal Exchange (Oct 22-26, 2007)

12. Protecting Trade Secrets in the US US Trade Secret Law –State Law. Uniform Trade Secrets Act (UTSA) Misappropriation of Trade Secrets (TS) –Use or disclosure of a TS by person who »used improper means to acquire knowledge of TS, or »knew or had reason to know TS was: ° derived by improper means, ° derived from/through person with duty to protect, or ° acquired in manner creating a duty to protect, or »before a material change in position, knew/reason to know it was a TS acquired by accident or mistake 2007 US/China Legal Exchange (Oct 22-26, 2007)

13. Protecting Trade Secrets in the US US Trade Secret Law –Common Law. §757, Restatement of Torts (1939); and §§ 39-45, Restatement (Third) of Unfair Competition (1995) –What is a Trade Secret (TS) –Misappropriation of Trade Secrets 2007 US/China Legal Exchange (Oct 22-26, 2007)

14. Protecting Trade Secrets in the US US Trade Secret Law –Common Law. §757, Restatement of Torts (1939); and §§ 39-45, Restatement (Third) of Unfair Competition (1995) –What is a Trade Secret –Information … –Sufficiently valuable –Sufficiently secret –Provides economic advantage 2007 US/China Legal Exchange (Oct 22-26, 2007) Intended to be consistent with the definition of trade secrets in the UTSA.

15. Protecting Trade Secrets in the US US Trade Secret Law –Common Law. §757, Restatement of Torts (1939); and §§ 39-45, Restatement (Third) of Unfair Competition (1995) Misappropriation of Trade Secrets (TS) –Acquisition, use or disclosure of a trade secret –Wrongfulness (misappropriation) 2007 US/China Legal Exchange (Oct 22-26, 2007) Consistent with the UTSA.

16. Protecting Trade Secrets in the US US Trade Secret Law –Federal Law The Trade Secrets Act The Computer Fraud and Abuse Act The Economic Espionage Act of 1996 The National Stolen Property Act Mail Fraud, Wire Fraud, etc. 2007 US/China Legal Exchange (Oct 22-26, 2007)

17. Protecting Trade Secrets in the US US Trade Secret Law Enforcing Trade Secret Rights Trade Secrets as Part of Your Business 2007 US/China Legal Exchange (Oct 22-26, 2007)

18. Protecting Trade Secrets in the US Enforcing Trade Secret Rights –Enforcement Authorities –Protecting Trade Secrets in Litigation –Case Studies 2007 US/China Legal Exchange (Oct 22-26, 2007)

19. Protecting Trade Secrets in the US Enforcing Trade Secret Rights –Enforcement Authorities State Courts (TS Statute, common law, breach of contract) –Legal Relief »temporary & permanent injunctions »court-ordered affirmative actions –Equitable Relief »royalties »compensatory damages »punitive damages Federal Courts (Statute, breach of contract) 2007 US/China Legal Exchange (Oct 22-26, 2007)

20. Protecting Trade Secrets in the US Enforcing Trade Secret Rights –Protecting Trade Secrets in Litigation Request protective order during discovery Request in-camera proceedings Courts may seal records Courts may order a person not to disclose alleged trade secrets without court approval Always at risk—hard to “un-ring the bell” 2007 US/China Legal Exchange (Oct 22-26, 2007)

21. Protecting Trade Secrets in the US Enforcing Trade Secret Rights –Case Studies 2007 US/China Legal Exchange (Oct 22-26, 2007)

22. Protecting Trade Secrets in the US 2007 US/China Legal Exchange (Oct 22-26, 2007) QUESTIONS / COMMENTS ?

23. Protecting Trade Secrets in the US US Trade Secret Law Enforcing Trade Secret Rights Trade Secrets as Part of Your Business 2007 US/China Legal Exchange (Oct 22-26, 2007)

24. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –Importance of Protecting Trade Secrets –General Business Practices to Protect Trade Secrets 2007 US/China Legal Exchange (Oct 22-26, 2007)

25. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –Importance of Protecting Trade Secrets Broadly defined, potentially everywhere Define & differentiate your business You can only protect what you know & understand 2007 US/China Legal Exchange (Oct 22-26, 2007)

26. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets Protection linked to secrecy Practical Protection Measures Who is responsible for protection? How do you protect responsibly? 2007 US/China Legal Exchange (Oct 22-26, 2007)

27. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets –What are your trade secrets? –Where are your trade secrets? –Why they are valuable? –Who knows about them? –How are you protecting them? 2007 US/China Legal Exchange (Oct 22-26, 2007)

28. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets –What are your trade secrets? –Where are your trade secrets? –Why they are valuable? –Who knows about them? –How are you protecting them? 2007 US/China Legal Exchange (Oct 22-26, 2007) what differentiates your products what differentiates your business what is “secret”

29. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets –What are your trade secrets? –Where are your trade secrets? –Why they are valuable? –Who knows about them? –How are you protecting them? 2007 US/China Legal Exchange (Oct 22-26, 2007) manufacturing/R&D facilities business centers computer systems!

30. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets –What are your trade secrets? –Where are your trade secrets? –Why they are valuable? –Who knows about them? –How are you protecting them? 2007 US/China Legal Exchange (Oct 22-26, 2007) how much competitive advantage how easy/expensive to protect what is the life span

31. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets –What are your trade secrets? –Where are your trade secrets? –Why they are valuable? –Who knows about them? –How are you protecting them? 2007 US/China Legal Exchange (Oct 22-26, 2007) how many people “need to know” internally & externally who should “own” them

32. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Identify & understand your [key] trade secrets –What are your trade secrets? –Where are your trade secrets? –Why they are valuable? –Who knows about them? –How are you protecting them? 2007 US/China Legal Exchange (Oct 22-26, 2007) responsible parties processes & contracts auditing

33. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Protection linked to secrecy –How secret (extent TS is known inside/outside the company) –Value of TS to company –Extent of protection measures –Cost to develop TS –Ease of acquisition/duplication 2007 US/China Legal Exchange (Oct 22-26, 2007)

34. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Practical Protection Measures –“Reasonable under the circumstances” –Processes, documentation & contracts »Employees »Third parties »Business –Security (physical & systems) –Hide your secrets 2007 US/China Legal Exchange (Oct 22-26, 2007)

35. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s Who is responsible for protection? –Everyone is responsible to protect trade secrets –Executive leadership should take ultimate responsibility –Experienced managers should have direct responsibility –Everyone must feel responsible to protect trade secrets 2007 US/China Legal Exchange (Oct 22-26, 2007)

36. Protecting Trade Secrets in the US Trade Secrets as Part of Your Business –General Business Practices to Protect TS’s How do you protect responsibly? –Review: “trade secrets” are very broadly defined –How many trade secrets can you afford to protect –Understand costs: »good business practices »incremental protection –Sell the value to the company and the relevant partners 2007 US/China Legal Exchange (Oct 22-26, 2007)

37. Protecting Trade Secrets in the US 2007 US/China Legal Exchange (Oct 22-26, 2007) QUESTIONS / COMMENTS ?

38. Protecting Trade Secrets in the US Rex Hockaday Senior Corporate Counsel Manager, Asia Pacific IP Office Caterpillar (China) Investment Co., Ltd. Room 1701 China Life Tower No. 16 Chaoyangmenwai Avenue Beijing 100020, P.R. China Phone:+86 (10) 5921 0595 Mobile:+86 139 1117 2352 Fax:+86 (10) 5921 0099 Email:hockaday_rex_d@cat.com 2007 US/China Legal Exchange (Oct 22-26, 2007)

39. Protecting Trade Secrets in the United States 2007 US / China Legal Exchange (Xian, Beijing, Shanghai) Rex Hockaday, Caterpillar (China) Investment Co., Ltd. 2007 US/China Legal Exchange (Oct 22-26, 2007)