Trade Secrets and Court Cases

A Coke employee was recently arrested for trying to sell Pepsi some of Coke’s secret formulas. If the case goes to court, I presume that the formulas will be entered in as evidence. Will they then become a matter of public record and viewable by anyone? Or will the judge be able to order them sealed? I know that when a former member of the Church of $cientology sued the church, it’s private teachings became public (and thus the subject of public ridicule), so presumably it’s possible that they could become public record, but I imagine that Coke could argue making such information public could damage it’s business. So what’s most likely to happen?

In cases involving trade secrets, it is fairly common for the court to order records sealed as necessary to protect those trade secrets. And this for exactly the reason you allude to: without such an order, someone would, for practical purposes, have to give up their trade secret in order to bring the suit.

Also, commonly the attorneys for the parties enter into a stipulation under which the ATTORNEYS but not the respective parties, can examine documents from both sides. That way the attorneys have the information they need to argue whether or not trade secrets have been violated, but the information is shared ONLY FOR THAT PURPOSE. It does not become a matter of public record, and it is not even made available to the parties.

I’m not super familiar with the case (actually, I believe multiple cases) involving scientology. I was under the impression that they had sued for copyright violations, not violating trade secrets. If you sue for copyright infringement, then it is a matter of public record, but the purpose of the copyright law is to protect rights to publish and make copies, NOT to protect secrets. So, from the law’s perspective, there is, as far as I can imagine, never need to order the material that is the subject of the dispute sealed.

According to this article “Coca-Cola asked for a protective order on Thursday so its trade secrets allegedly put up for sale by an employee will not be divulged in any legal action” so there is apparently a standard procedure in place for such things.

The article doesn’t say anything else on the topic beyond the above sentence though.

Here is an example of a confidentiality order (which is a form of protective order): http://www.scd.uscourts.gov/DOCS/confidential/confidentialityorder.pdf

There are other variations. As you can see, there is a provision for filing confidential documents under seal, redacting them, or submitting them to the judge for *in camera * review.

Here is the rule on protective orders in federal court.

http://www.law.cornell.edu/rules/frcp/Rule26.htm