The 2017 AIPLA Economic Survey reports that the average cost of a Trade Secret case ranges from $400,000 to $1,650,000. The discovery process is often cloaked with secrecy, more times than not prohibiting the clients from reviewing the materials produced by the opposing side or even hearing the testimony obtained in the case. These restrictions often lead to frustration and a sense of helplessness in trade secret cases.
The frustration is exacerbated by the nature of the claim itself, one party has alleged another has stolen valuable secret information. This leads to immediate distrust and anger between the parties. In mediation, the alleged victim must now negotiate with the accused thief, adding insult to injury. The defendant, on the other hand, is often offended by being accused of a theft, and the defendant commonly claims the litigation is merely a fishing expedition by the plaintiff to uncover the defendant’s own trade secrets. These allegations alone make trade secret cases more difficult than other cases to settle. In addition, it is very difficult to arrive at a value of the alleged secrets, which by the very nature of the property is not known and certainly not for sale.
Despite the hurdles, mediation is an attractive option for trade secret cases due in large part to the confidentiality of the process. A court proceeding is a public event. While the attorneys and the court may do their best to protect the trade secrets from becoming public, this is always a threat. Some courts are hesitant to seal any court proceeding from the public, adding more weight to the success of mediation.
When trade secret disputes are as complex and technical as patent disputes, a mediator with experience in technical matters can assist the parties in reaching common ground without undue delay and frustration of trying to teach the mediator complex material.
The Federal Defend Trade Secrets Act has a relatively short statute of limitations period. Sometimes theft of intellectual property may not be discovered for a period of time, making it necessary to file suit before any opportunity to engage in settlement discussion. If this has occurred, an early mediation may save all the parties substantial time and energy.
