Free for a Fee

It is frightening to think that valuable corporate trade secrets could be lost with the click of a mouse. But as electronic court filing becomes increasingly prevalent, the risk of inadvertent disclosure of sensitive information online—and the resulting loss of trade secret protection—is becoming more and more real.

A litigant in New York recently learned this lesson firsthand, narrowly escaping what could have been extremely harsh consequences from an accidental e-filing. In HMS Holdings Corp. v. Arendt, the Supreme Court of New York refused to create a per se rule that would unfairly punish Plaintiff HMS Holdings Corp. (“HMS”) for its mistaken disclosure of more than 1,500 pages containing corporate trade secrets, but the court did leave room for serious consequences in future cases.

The HMS court has created a ten-factor test that could result in loss of trade secret status under some circumstances. However, careful study of these factors can help avoid—or at least mitigate—damage in the event a mistake is made.

HMS Holdings Corp. v. Arendt

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The content in this post was found at http://www.tradesecretslaw.com/2015/09/articles/trade-secrets/when-e-filing-goes-wrong-how-to-protect-your-trade-secrets-in-the-event-of-inadvertent-online-disclosure/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.