ILNews

Court rules on discovery of trade secrets

Michael W. Hoskins
January 1, 2007
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A tire making formula is considered a trade secret and doesn't have to be disclosed in discovery, the Indiana Supreme Court ruled today.

The unanimous 11-page ruling comes in a much-anticipated first impression case of Bridgestone Americas Holding, Inc. v. Violet Mayberry, et al., No. 48A02-0504-CV-368, which stemmed from a fatal August 2001 accident in which a woman lost control of her vehicle on Interstate 69 after one of the tires came apart. Her family sued the tire maker; during discovery they asked for certain documents that included the skim stock formula to determine what contributed to the tire tread coming apart and, ultimately, Harmony B. Wigley's death.

Madison Superior Judge Thomas Newman ultimately issued a protective order compelling Bridgestone to disclose its skim stock formula, and the tire maker appealed. The Court of Appeals affirmed the decision in August 2006, and the Supreme Court took the case earlier this year.

In accepting the case, justices considered how closely trade secrets should be guarded when it comes to discovery and whether certain information should be disclosed at all.

"We encounter here a question of first impression: how should an Indiana court analyze a request to protect a trade secret from pre-trial discovery?" Chief Justice Randall T. Shepard wrote. "We conclude that the test prevailing in other jurisdictions is suitable for application under Indiana Trial Rule 26(C). In this case, the demanding party did not demonstrate the necessity of disclosing the secret."

The chief justice wrote that the application of Rule 26 to trade secrets should be informed by Indiana's adoption of the Uniform Trade Secrets Act (UTSA), which has been adopted in all but five states and provides a common legal framework for protecting trade secrets from misappropriation.

In turning to the UTSA, the court focuses on a three-part balancing test as the proper analysis for determining whether "good cause" has been shown to protect a trade secret.

Justices agree that happened here, that Bridgestone showed the formula was a trade secret, and the family didn't show why it was necessary. But the court also issued a word of caution:

"Of course, trade secrets may be valuable during the course of litigation not involving misappropriation claims, and there are moments when justice requires disclosure," Chief Justice Shepard wrote. "Still, courts must proceed with care when supervising the discovery of trade secrets, lest the judiciary be used to achieve misappropriation or mere leverage."

Today's ruling reverses the trial court's protective order directing disclosure of Bridgestone's skim stock formula and remands the case for further proceedings on the merits.
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  1. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  2. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  3. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  4. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  5. I totally agree with John Smith.

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