The CH Trade Secrets Review, 2020 Part III

In Part III of this newsletter, we continue our review of significant developments, cases, and verdicts in 2020.

Confidentiality

Disclosure To Government

Maintaining confidentiality of information that a company regards as a trade secret is a challenge when its customers are government agencies.  In Amgen, Reuters News made a request under the California Public Records Act (CPRA) for access to records relating to price increase notices Agmen sent to its customers, the California Correctional Health Care Services (CCHCS), and approximately 170 other registered purchasers. Amgen filed a complaint and petition for writ of mandate seeking injunctive relief to block disclosure (a “reverse-CPRA” action). The trial court granted Amgen’s motion for a preliminary injunction.

On CCHCS’s appeal from the order, the court held that the trial court abused its discretion when it concluded that Amgen had sufficiently shown that its price increase notice was a trade secret notwithstanding its disclosure to registered purchasers. More than 170 purchasers had the incentive to use the information to their benefit and Amgen’s detriment; there were no restrictions on using or further disseminating the information; and, Amgen was unable to explain to the court’s satisfaction how its purported trade secret maintained its confidentiality and value in light of these facts. The court also disagreed with the trial court and concluded that it abused its discretion when it found that the balance of harms favored Amgen. The court reversed the trial court’s order granting a preliminary injunction. Amgen Inc. v. Health Care Services (CA 2020)

Attorney’s fees/bad faith

The Illinois Trade Secrets Act, like other state laws following the Uniform Trade Secrets Act, provides for the recovery of attorney’s fees if the defendant prevails in defending against a “bad faith” misappropriation of trade secrets claim. The Illinois Appellate Court found that “[plaintiff] MSM admitted to providing material information about its customers to radio stations without requiring the stations to sign confidentiality agreements and knowing the radio stations would air the customers’ information or otherwise disclose it.” It therefore affirmed the lower court’s ruling awarding the defendant attorney’s fees, finding it did not constitute an abuse of discretion. Multimedia Sales & Marketing, Inc. v. Marzullo (IL 2020)

If you have any questions about this Newsletter or would like to join as a contributor, please contact Dave Shenian, dshenian@clarkhill.com, 213-417-5102.