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Practical Considerations of Working with Experts in Trade Secret Litigation

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Practical Considerations of Working with Experts in Trade Secret Litigation PRACTICAL CONSIDERATIONS OF WORKING WITH EXPERTS IN TRADE SECRET LITIGATION HILDA C. GALVAN Jones Day 2727 North Hmood Street Dallas, Texas 75201 Y State Bar of Texas 17" ANNUAL INTELLECTUAL PROPERTY LAW COURSE March 4-5,2004 san Antonio CHAPTER 4 Hilda C. Galvan Litigation Group Intellectual Property Practice Location: Dallas Title: Partner Admitted: 1993 Texas; registered 1995 to practice before the United States Patent and Trademark Office Education: The University of Texas at El Paso (B.S.E.E. 1985); The University of Texas at Austin (Texas International Law Journal; J.D. 1993) Clerkship: Law Intern to Justice Jack Hightower, Texas Supreme Court (Fall 1992) Joined Firm: 1996 Telephone: 2 14.969.4556 Facsimile: 214.969.5 100 E-mail: hcgalvanmionesday.com Hilda Galvan practices in the area of intellectual property law, including patent, trademark, copyright, trade secret, and unfair competition, and has worked with such diverse technologies as computer software, specialized mobile radio technology, semiconductor processing techniques, semiconductor memory designs, car speakers, offshore oil and gas platforms, optic lenses, and soft drink preparation systems. Hilda has substantial litigation experience, particularly in patent litigation matters in various federal and appellate courts, including the International Trade Commission (ITC). She has also developed a growing practice in trademark litigation, with an emphasis on domestic and foreign protection. In addition to her litigation practice, Hilda is registered to practice before the U.S. Patent and Trademark Ofice and has an active transactional and counseling practice in which she advises clients in intellectual property matters, particularly in the computer software and telecommunication fields, Hilda is a member of the intellectual property law sections of the American Bar Association, the + State Bar of Texas, and the Dallas Bar Association. She has served as treasurer, director, and scholarship committee chair for the Dallas Hispanic Bar Foundation. She is also a member of the Dallas Leadership * Class of 1997 and has served as special counsel to the city of Coppell (Texas). Hilda has been a speaker at a number of seminars on topics relating to protection of software and the use of experts in patent litigation. Prior to entering law school, Hilda was a project engineer for a telecommunications company, and she is fluent in Spanish. Practical Considerations of Working with ExDerts in Trade Secret Litigation ChaDter 4 PRACTICAL CONSIDERATIONS OF technical experts are used to determine whether WORKING WITH EXPERTS IN TRADE the information at issues is in fact a trade secret or SECRET LITIGATION whether it is known in the industry. Technical experts are also used to determine if there was a I. INTRODUCTION misappropriation of a trade secret; in other words, whether there was independent development. This paper will attempt to address some of the DSC Communications Corp. v. Next Level issues that may arise when working with expert Communications, 107 F.3d 322 (5’ Cir. 1997). witnesses in trade secret cases, particularly as it may Experts are also used in trade secret cases to concern communications with expert witnesses and testify on damages. See Alcatel USA, Inc. v. discovery of those communications.’ This paper does Cisco Systems, Inc. 239 F.Supp.2d 660 (E.D. Tex. not address the admissibility of expert testimony as the 2002); Houston Mercantile Exchange Corp. v. scope of this topic requires its own paper. Dailey Petroleum Corp., 930 S.W.2d 242 II. ROLE OF EXPERT WITNESS (Tex.App.-Hous. (14 Dist.) 1996). A. The Use of Expert Witnesses In Trade Secret B. Categories of Experts In Trade Secret Cases Cases 1. Lawsuits based on misappropriation of trade 1. One of the distinctive characteristics of a modem secrets are governed by state law. Even so, trade trial is the extensive reliance upon expert secret cases are typically in federal court because testimony to carry the burden of persuading the the misappropriation claims are usually joined jury to reach a particular result. The outcome of with other claims such as patent or copyright the so-called “battle of the experts” frequently infiingement or due to diversity jurisdiction. determines the resolution of the trial. a. In federal court, Rule 26 governs expert witness Consequently the selection of the expert may be testimony and discovery. Rule 26(b)(4) divides crucial to the outcome--whether a case is won or experts into at least three classes and deals lost often is determined by which side has most separately with each: (1) testifying expert; (2) effectively chosen and presented expert testimony. consulting experts (the facts and opinions of 2. The most frequent types of trials involving experts experts in this category can be discovered only on are tort cases (49%), primarily those involving a showing of exceptional circumstances); and (3) personal injury or medical malpractice. Christina experts whose information was not acquired in L. Studebaker et al., Judge and Attorney preparation for trial (This class, which includes Experiences, Practices, and Concerns Regarding both regular employees of a party not specially Expert Testimony in Federal Civil Trials, 8 employed on the case and also experts who were Psychol. Pub.Pol’y & L. 309,3 17-3 18 (September actors or viewers of the occurrences that gave 2002). Tort cases are followed in frequency by right to suit. All facts and opinions are fieely civil rights cases (23%); contract cases (23%); discoverable as with any ordinary witness.) intellectual property cases (1 0%); labor cases b. An expert is identified as a testifying expert (2%); prisoner caes (2%) and other civil cases pursuant to Rule 26 at the times and in the (8%). Experts are overrepresented in intellectual sequence directed by the Court. In the absence of property cases which represent 3% of all civil a court order or the parties stipulation, the expert trials. Id. is identified and the required disclosures are made 3. While experts in intellectual property cases are at least 90 days before the trial date. If the used primarily in patent cases, they are also used evidence is intended solely to contradict or rebut in other intellectual property cases, including evidence on the same subject matter identified by trade secret litigation. In trade secret cases, another party, then the disclosures must be made within 30 days after the disclosure made by the ‘This paper is an outline intended to provide the reader other party. with rules and case precedent relevant to the discussed C. In Texas state court, there are three categories of topics, and to raise considerations, both ethical and experts: consulting expert, reviewed-consulting practical, for the interested reader. It is not an expert and testifying expert. TEx. R. CIV. P. 192. exhaustive analysis, nor source of all available A “consulting-only expert” is defined as “an information on these topics, and should not be viewed expert who has consulted, retained, or specially as such. The views expressed in this paper are not to employed by a party in anticipation of litigation or be attributed to Jones Day, any of its partners, in preparation for trial, but who is not a testifjhg associates or clients, past or present. expert.” TEX.R. CW.P. 192.7(d). A reviewed- DLI- 5816904~11 Practical Considerations of Working with Experts in Trade Secret Litigation Chapter4 .,’ consulting expert is a consulting expert whose (1) “Confidential information” includes both opinion or impressions have been reviewed by the “privileged information” and “unprivileged client testifying expert. TEX.R. CIV. P. 192.3(e). A information.” “Privileged information’’ refers to testifying expert is defined as “an expert who may the information of a client protected by the be called to testify as an expert witness at trial. lawyer-client privilege of Rule 503 of the Texas TEX.R. CIV.P. 192.7(c). Rules of Evidence or of Rule 503 of the Texas Rules of Criminal Evidence or by principles of d. An expert in Texas state court is designated as a attorney-client privilege governed by Rule 501 of testifying expert through a request for disclosure the Federal Rules of Evidence for United States under Tex. R. Civ. P. 194.1 and through Courts and Magistrates. “Unprivileged client depositions and reports permitted under Tex. R. information” means all information relating to a Civ. P. 195. A party must designate experts by client or furnished by the client, other than the later of 30 days after the request is served or privileged information, acquired by the lawyer 90 days before the end of the discovery period as during the course of or by reason of the to experts testifying for a party seeking representation of the client. affirmative relief; or 60 days before the end of the discovery period as to all other experts. TEX.R. (2) Except as permitted by paragraphs (c) and (d), or CIV.P. 195.2. A party may redesignate an expert as required by paragraphs (e) and (f), a lawyer from a testifying expert to a consulting expert so shall not knowingly: long as there is no evidence that the redesignation (a) Reveal confidential information of a client or a was for an improper purpose. Such redesignation former client to: of experts should not be “an offensive and (1)a person that the client has instructed is not to unacceptable use of discovery mechanisms receive the information; or intended to defeat the salutary objectives of (2)anyone else, other than the client, the client’s discovery.” Tom L. Scott, Inc. v. McIlhany, 798 representatives or the members, associates, or S.W.2d 556, 559 (Tex. 199O)(orig. proceeding); employees of the lawyer‘s law finn. see also Lopez v. Martin, 10 S.W.3d 790,795 (Tex. App.--Corpus Christi 2000, pet.
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