R Mark Halligan, noted author and trade secret attorney with FisherBroyles, LLP recently discussed the Defend Trade Secrets Act of 2016 and his new book, Trade Secret Asset Management 2018: A Guide to Information Asset Management Including RICO and Blockchain, with CISO Lee Neubecker. War stories involving success in using computer forensics to help his clients obtain great results are also shared in this interview. A transcript, as well as a link to Mr. Halligan’s new book on Amazon, is available below.
Mark Halligan: Very good, Lee, thanks for inviting me.
Halligan: Well the Defend Trade Secrets Act of 2016 is a watershed event in intellectual property law. It’s the culmination of years of work on my part to emphasize the need for a federal-civil cause of action. In most cases the victims are corporations and they should have access to the federal courts.
Halligan: In any case involving the alleged misappropriation or actual misappropriation or threatened misappropriation of trade secrets, you now have access to bring a private civil cause of action that is subject to the jurisdiction of the federal courts, nationwide.
Halligan: That’s the next phase in trade secrets law, that is the internal act of management by companies of their trade secret assets, which involves identification, classification, protection and valuation. In order to be able to use the Defend Trade Secrets Act and be able to allow this intellectual property right to thrive and grow, now with federal protection in the courts, you have to have internal systems in place for these trade secret assets.
Halligan: Well, unfortunately companies wait until the horse is out of the barn and then they scramble to retain outside counsel, and then I scramble around trying to determine what the trade secrets are and what the evidence of misappropriation is. We’ve seen this play out in major cases now, most recently the Waymo case out of California where everybody is running around trying to determine what’s that issue in the case.
So, it’s better to do that ahead of time with internal management.
Halligan: Yes, absolutely. If you have internal, active trade secret management, you are able to identify within a matter of seconds, literally, the trade secrets that are in issue and the evidence that the employee had access to those trade secrets, or the former employee.
Halligan: I do, the name of the program is the Trade Secret Examiner, and it was introduced, commercially deployed at version four or version five, last August, and it is a revolutionary new platform to assist companies in the identification, classification, protection and valuation of trade secret assets.
Halligan: Well, if they have been engaged in internal trade secret asset management, then I’d expect they have a trade secret incident response team that can be activated immediately, and a SWAT team, which is essentially outside counsel, ready to go to the courthouse. If they do not have those procedures and mechanisms in place, then they call me and I head out to the company with a yellow pad and a pen and start to interview witnesses to see if I can determine what the trade secrets are and what the evidence of misappropriation is.
Halligan: From a forensics standpoint, the first thing you have to do is cordon off the area where the defendant worked or had computers, and get EnCase images of the computer to preserve the evidence. You certainly don’t want to have the IT department foiling around inside the computer because that will change the evidence.
Halligan: That’s fascinating, and that shows you how critical it is to do the forensics correctly at the very beginning of the case. Could be case determining too.
Halligan: A trade secret misappropriation case involves the actual or threatened misappropriation of trade secrets, so what you’re trying to do is protect these fragile assets. A trade secret, once lost, is lost forever. You’re attempting to stop the bleeding, plug the dyke, get an order that there is to be a preservation of evidence, also stop the continued misappropriation activity or, if it has not occurred yet, through injunctive relief set up a wall to prevent the misappropriation of trade secrets, and to the extent possible, to prevent its dissemination to other computers in the United States or other parts of the world.
Halligan: What I have seen in several occasions, and I represented a major company in a case involving very serious acts of trade secret misappropriation and alleged foreign economic espionage. The federal courts want to protect the privacy rights of individuals, with electronically stored information, so there’s always this tension the plaintiff seeking to prove up its trade secret case or misappropriation of trade secrets with the defendant’s interest in protecting privacy of the files and things that are on the computer.
So, oftentimes the court requires search terms, and you start off the case by looking at whether or not these search terms pop up on the computers. In a case that I was involved with, when those search terms were plugged in, we found that a file destruction software had been run, and that the clock had been changed. With that kind of evidence before the judge, we were then given access to the entire computer, no more search terms.
When we got access to the entire computer, we found other third parties that were involved. And, of course, the case expanded to involve other defendants and other entities. But it all happened with the finding on the initial search terms of the addition of the file destruction software.
Halligan: Thank you.