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TRADE SECRET DISCLOSURE FOLLOWS THREE-PART TEST

The National Law Journal Vol. 30, No. 17 (2008) A TRIAL COURT ERRED in ordering Bridgestone to disclose its skim stock formula during pretrial discovery in a products liability suit, the Indiana Supreme Court ruled on Dec. 18 in a case of first impression. Bridgestone Americas Holding Inc. v. Mayberry, No. 48S02-0703-CV-120. In 2001, Harmony Wigley died in a collision after losing control of her 1992 Ford Escort. Her estate's representative, Violet Mayberry, and Wigley's mother filed a products liability suit against several Bridgestone and Firestone companies, alleging that tread separation in a steel-belted tire caused the accident. During pretrial discovery, the plaintiffs sought the formula for the steel belt skim stock on the tire in question. Skim stock is one of several compounds that adhere the rubber with the steel. Bridgestone objected and moved for a protective order covering all trade secrets used to produce the tires in question, including the skim stock formula. An Indiana trial judge ordered Bridgestone to disclose the skim stock formula. An intermediate appellate court rejected Bridgestone's argument that the plaintiffs had failed to show that their need for the formula outweighed the harm of disclosure. Reversing, the Indiana Supreme Court applied a three-part analysis -- from the widely adopted Fed. R. Civ. P. 26(c)(7) -- for trial judges to determine whether trade secrets are subject to discovery in litigation. First, the party opposing discovery must show that the information sought is a 'trade secret or other confidential research, development or commercial information,' and that disclosure would be harmful. Then the burden shifts to the party seeking discovery to show that the information is relevant and necessary for a trial. If both parties satisfy their burdens, the court must weigh the potential harm of disclosure against the need for the information in reaching a decision. Applying the test to the case at issue, the court said the record clearly showed that the information was a trade secret and that the plaintiffs had failed to show that the information was necessary to the presentation of their case.

Full post as published by The Trade Secrets Vault on January 13, 2008 (boomark / email).