Thursday, May 22, 2014

Novel Remedy Crafted in E-Discovery Decision by Judge Terrence R. Nealon of Lackawanna County

In his recent decision in the case of Sandvik, Inc. v. Mecca C & S, Inc., No. 2013-CV-4003 (Lacka. Co. May 21, 2014 Nealon, J.), Judge Terrence R. Nealon addressed a novel e-discovery dispute in the context of a case involving trade disputes between two software manufacturers.

In Sandvik, the Plaintiff-company sued one of its employees for allegedly utilizing the company's trade secrets in the creation of allegedly similar software.  The defendant denied utilizing any trade secrets of his former employer and asserted that he developed superior software by utilizing publicly recognized engineering concepts an his own ingenuity.

The case came before Judge Nealon on an appeal from a decision by Discovery Master Henry Burke who had ordered the Defendant-former employee to provide the Plaintiff-company with access to his software and trade secrets.  The Defendant-former employee appealed that decision, in part, because allowing his former employer access to his trade secrets might enable the Plaintiff-company to possibly replicate what the Defendant allegedly invented.

After thoroughly reviewing the Rules and law pertaining to e-discovery and discovery of trade secret information (and with no Pennsylvania case directly on point), Judge Nealon noted that, in such cases, the person claiming privilege from disclosing trade secrets must first show that the material sought constitutes proprietary information.  If the party resisting discovery makes this threshold showing, the burden would then shift to the party seeking the discovery to show a compelling need for the disclosure that outweighs any harm that may be caused by the disclosure.

In crafting a novel remedy, Judge Nealon ordered that a software expert by appointed by the court to review the parties' respective software to make an initial determination on whether the Defendant-former employee's software impermissibly integrates his former employer's trade secrets as alleged.

If there still remained a discovery dispute thereafter, Judge Nealon would review the expert's report in camera inspection for a final decision on the discoverability of the information at issue.

Anyone wishing to review a copy of this decision may click this LINK.

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