What’s Enough to Show Information Is “Trade Secret” for Filing Under Seal?

DEPUY SYNTHES PRODUCTS, INC. v. VETERINARY ORTHOPEDIC IMPLANT, INC.

Before Prost, Clevenger, and Dyk.  Appeal from the Middle District of Florida. 

Summary: Internal efforts to maintain confidentiality are not enough to establish a confidential relationship with a third party and to warrant denying the public’s right to access information on a public docket.

Depuy Synthes Products (“Depuy”) and Veterinary Orthopedic Implants (“VOI”) are competitors in the market for veterinary orthopedic implants. Depuy sued VOI for patent infringement. Depuy filed under seal an unopposed motion for leave to amend its complaint. The amended complaint joined as a defendant the manufacturer of VOI’s accused products, disclosed the identity of the manufacturer, and information about the business relationship between VOI and the manufacturer. VOI argued that the manufacturer’s identity and related information should be redacted from the amended complaint, on the basis that it constituted trade secret information. Depuy argued that the manufacturer’s identity was already publicly known and did not warrant publicly filing a redacted amended complaint.

The district court found that the identity of VOI’s manufacturer was not a trade secret because VOI failed to take reasonable measures to protect the manufacturer’s identity, the parties did not have any confidentiality agreement, and there was an email that suggested VOI’s relationship with the manufacturer was known within the relevant community. Thus, the district court ordered the amended complaint to be publicly filed without redaction. VOI appealed the district court’s order.

The Federal Circuit affirmed the district court’s order, and held that the district court did not clearly err by finding that VOI did not take reasonable measures to protect its manufacturer’s identity. The Federal Circuit also acknowledged that VOI did not have an express confidentiality agreement, nor did it produce any evidence to show it established a confidential relationship with the manufacturer by way of custom or course of dealing. Thus, the Federal Circuit confirmed that VOI’s “internal efforts” to keep the manufacturer’s identity confidential were not sufficient, in and of themselves, to constitute “reasonable efforts” to maintain secrecy under the Uniform Trade Secrets Act. The Federal Circuit also affirmed the district court’s decision to publicly release business information related to VOI and the manufacturer, given VOI produced no evidence to demonstrate how it would be harmed by the public filing of this information.

Editor: Paul Stewart