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Strategies to Protect Trade Secrets in Arbitration

Photo of humanoid toy blocks surrounding a padlock, depicting the concept of protecting trade secrets during arbitration

Secrets may not make friends, but they certainly make for complicated litigation! Maintaining confidentiality of trade secrets during an arbitration process is a difficult task. In this article, we’ll share some tips and strategies to help you protect your clients while you advocate on their behalf.

The Top-Down Approach

During corporate arbitration, the first step of preserving confidential information is by ensuring that trade secrets receive explicit protections in your original agreement. Whether you’ve prepared a document of sale or an employment contract, incorporating trade secret protections will provide peace of mind.

Pre-Trial Protections

If you haven’t incorporated trade secret protections in the initial agreement, you’ll need to introduce them before the commencement of arbitration. After the process has been initiated, the respondent must be notified of their obligations to ensure that the trade secrets do not appear in response pleadings. Unfortunately, some uncooperative parties may refuse to reach an agreement without intervention. In these cases, you may need to pursue emergency relief.

Emergency relief requires that you submit a request as described in Commercial Rule 38 of the American Arbitration Association. (For multinational corporations, you may need to reference Rules 28 and 29 of the International Chamber of Commerce Arbitration.) After a tribunal is appointed, you’ll need to demonstrate the importance of ongoing trade secret protections and justify the issuance of a protective order. Ensure that you’re prepared to discuss the restraints and protocols that will be required for the remainder of the proceeding.

Hearing & Post-Trial Strategies

A comprehensive confidentiality agreement can typically prevent the disclosure of trade secrets during your hearing and during the post-trial phase. After the hearing is complete, it is appropriate to reinforce the previously established protections. If the opposing party must retain access to trade secrets, you can request a signed acknowledgment of their confidentiality obligations

The final challenge of your arbitration will involve the post-award proceedings. After a motion to confirm or vacate, you’ll need to determine how both parties can communicate their position on the award to the court without breaching confidentiality.

Final Thoughts

Thanks for reading! We hope we’ve been able to shed some light on the challenges of preserving trade secrets throughout the arbitration process. If you enjoyed this article, let us know in the comments, and feel free to share it on social media.

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