trade secret

Court dismisses DNC trade secret case

The Democratic National Committee (DNC) sued the Russian Federation and others for theft of trade secrets and other counts. 

The “relief from the alleged activities of the Russian Federation should be sought from the political branches of the Government and not from the courts,” because sovereign nations cannot be hauled into civil lawsuits without some waiver of their sovereign immunity. 

The DNC’s trade secret claims under the Defend Trade Secrets Act and a local Uniform Trade Secrets Act were dismissed because the DNC failed to identify facts that supported a conclusion that it owned any valuable trade secrets, took reasonable measures to protect, and derived commercial benefits from keeping the allegedly purloined information as trade secrets.  anything about the development of the list and strategies or the value of their alleged secrecy. The DNC made “conclusory allegations” that were “insufficient to state that the stolen documents were trade secrets.”

Also, the dissemination of already publicly released documents is not misappropriation, and trade secret law only protects against misappropriation. The DNC failed to allege liability, except for the Russian Federation, for any of the hacks of the DNC’s computer systems. The remaining defendants were not liable for use of documents, even if previously trade secret, after the documents were published. Use of “documents that had already been published by the Russian Federation and WikiLeaks is not an unlawful or improper use of the documents.” A “trade secret that becomes public knowledge is no longer a trade secret.” And “…so long as the disseminator did not participate in any wrongdoing in obtaining the materials in the first place,” the dissemination is protected free speech. 

The Court distinguished between soliciting someone “…to steal documents…” and “…a request for material that had been stolen,” already.  The law is clear that “journalists are allowed to request documents that have been stolen and to publish those documents.” 

The trade secret claims were dismissed “with prejudice” as barred by the First Amendment and for failure to state a claim for which the relief sought could be granted. So, the only course open for the DNC is to request reconsideration or to appeal the decision.

Lesson:  Take reasonable measures to protect your trade secrets like encryption and training for those that have access to trade secret information. Keep track of your trade secrets and how the information came into your possession, how much it cost, and the measures taken to protect it.

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