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what to expect in depositions

Asked and Answered: Depositions: What to Expect?

By John DiGiacomo

In this episode of the Asked and Answered podcast, we discuss what you should expect when being deposed. We also discuss politicians and their domain names, and the new federal Defend Trade Secrets Act.

Eric: Hello and welcome to Asked and Answered, Revision Legal Podcast where we discuss law, technology, and the news, and how it all intersects. We’re happy to have you here today, John how are you?


John: I’m good, how are you?


Eric: Doing great, it’s just office action Friday here right now.


John: Yeah, it’s like casual Friday but not casual at all.


Eric: Office actions sound like there’s so much action going on. They’re pretty dry.


John: Yeah, so for the listeners, office action is basically when you file a trademark and it gets refused, we have to write a brief. That’s not interesting, it’s not actually fun for attorneys, it’s just an administrative task. Office action Friday is just an administrative Friday.


Eric: Yeah, it’s, I really look forward to those, these Fridays. They’re so much fun. No, it’s nice to just get things checking off the list of things to do, and happy to be home after being in Dubai the last week.


John: Yes.


Eric: At the Domainers Meet 2016 Conference in Dubai, the UAE.


John: What did you think of Dubai?


Eric: It’s amazing what they’ve done in 40 years. To go from a speck in the desert to just an unbelievable city, but I was tied up a lot with the conference. It was a really interesting conference, tons of great speakers. I wish I could’ve explored the city more. Certainly an impressive city, and that was my first time in the Middle East, so it was quite an experience.


John: Yeah, I’m pretty jealous, I want to check out the Middle East. The next time it comes up, I’m going.


Eric: All right, you’re up. I think it’s January.


John: Oh is it, okay?


Eric: If I heard right, yeah. Today we planned on talking about something that comes up in a lot of lawsuits, and that you hear about in TV and movies, but I don’t know if people really know what it means. Maybe this will be helpful for some other attorneys to brush up on this, it’s depositions.


John: Yeah, so what’s the most famous deposition that you can think of? What’s the layperson think about when they think of depositions? You think of Mark Zuckerberg’s deposition in The Social Network?


Eric: Probably, yeah. That’s probably the one that gets the most airtime now, from that movie. Bill Clinton’s deposition. I remember watching, I don’t know what it was, but they were talking about how he agreed to a time limit for the deposition. In State Court, at least in Michigan, there’s no time limit. In Federal Court, depositions are limited to seven hours. I think if I remember correctly, Clinton agreed to something like two or three hours, and then he just put on an absolute show of taking an extremely long time to answer every single question, and basically just dragged it out where they got almost nothing out of it. I remember it being hailed as just an absolute piece of work.


John: That’s the risk when you depose an attorney. He knows the rules, and he knows how to exploit them, it’s right up his alley.


Eric: Yeah. Depositions are funny because they’re, for court proceedings, they’re so formal and structured, and depositions are this kind of informal, you’re sitting in a conference room, there’s no judge. It’s just attorneys and a court reporter, and you’re asking almost anything you want.


John: Yeah, you really can. In court, you often see attorneys object as to relevance, well, most of those rules are out the window in a deposition. You can get things from left field, and that particularly might be disturbing for somebody who’s never been in a deposition before. You can get questions about your medical history, about your arrest record, things that you may not believe that are relevant all of a sudden become the focus of an inquiry. Yeah, it can be weird for many people.


Eric: Yeah, so to talk about how does a deposition work? It is literally, you go into a conference room at a law office or at a hotel, and your attorney will usually be there, should be there. There will be opposing counsel, the one that will be asking questions of the deponent. There will be a court reporter, and then also parties are allowed to be at the deposition as well, so there can be a lot of people watching. Some are videotaped. It certainly adds a level of, I guess being uncomfortable with a huge video camera staring at you, knowing they’re picking up everything you say and how you look, and how you react to questions, all of that counts.


You’re sitting in this room, you’re going to be there a pretty long time. Unless it’s a quick little deposition, you can expect hours of questions. It’s informal, but your questions really matter. This will be a preview of your trial testimony. Attorneys use them to figure out what people are going to say, what they know, what they don’t know, and lock in testimony to build a case as it goes.


John: Yeah, and I think it’s important to note that these depositions are under oath, which means that you have to answer the deposition questions truthfully, but it also means that if you do not answer consistently, then ultimately when you get to trial, you can be what’s called impeached, which means that a prior inconsistent statement can be brought to light. It sheds some light on your credibility or lack thereof at trial, so it’s important to understand what you testified to previously, and it’s important to testify truthfully during the time of the deposition.


Eric: You don’t want your stories changing.


John: No.


Eric: I mean, if you have one side of your story at deposition, it’s pretty important that you would stick to that story at trial. If it changes dramatically, or even a little bit, the jury can look at that and say, “What else changed? What else maybe isn’t exactly the way you originally said it?” You don’t ever want to open up that door if you can.


Procedurally, depositions happen before trial. They’re rather informal, but still very important, and there should be time taken on each side to prepare for it, to understand where is it going to be? How long is it going to last? What are the types of questions that I’m going to get? The attorney, your attorney, should explain how they will protect you. Usually through the use of objections.


John: Typically the way that it works if you have to answer every question that’s been presented to you, and if you don’t, then it’s going to become a problem. An attorney objects to the form of the question, he objects to the actual substance of the question. For example, if the opposing counsel is asking you to answer something about the law that you may not know, but it doesn’t mean that you can’t answer the question. In fact, you do have to answer the question unless your attorney instructs you otherwise. It’s a little bit different than at trial, where an attorney objects and then you don’t answer the question because the objection is sustained. Here, you have to answer the question either way, and later attorneys will fight over whether or not the question was proper. As a general rule, unless your attorney instructs you otherwise, you have to actually say an answer.


Eric: Yeah, so really the objections, yes they matter, and yes they can help, but it’s most of the time not going to get you out of answering the question.


John: No, it’s not. Again, questions can be out of left field and you still have to answer them, and you have to answer them truthfully.


Eric: Yeah, and I think the role of the attorney to protect the deponent is also partly not really technical objections, but kind of just almost having your back. Being there, supporting you, pushing away the other attorney if they’re getting a little too aggressive, standing up for you in terms of how you’re being questions, the manner, the tone. Things like that, when you’re five and a half hours into a deposition, you can get tired and you can get annoyed, and the your attorney may send you some signals, by the way he defends you. Kind of help you get back on course, of to help you get your mind back and don’t get flustered with certain questions.


The role of the defensive attorney, we’re not in control. We’re kind of at the mercy of the other side, but you can certainly make your presence known, and still stand up for and help your client.


John: Yeah, I think a really good example is, I did a deposition recently, but we must have been four hours in, and the opposing counsel was asking our client whether or not she had ever been … Whether she knew what narcissistic personality disorder was, that was the first question. The next question was, “Had she ever been diagnosed with narcissistic personality disorder?”


This is a business dispute, it has nothing to do with psychology or some kind of medical condition. Then the opposing counsel proceeded to read the DSM-5, I believe, definition of narcissistic personality disorder to ask her whether she had certain characteristics. Obviously these questions were meant to harass, and I’m searching through my rule book at the deposition. I’m texting you, Eric, asking you, “Do we have any options on what we can do to bring to light this harassing line of questioning?” You said, “Well actually, I think there’s a piece of the Michigan Rules that says that you can record a deposition.”


You sent that section over to me, and I pulled out my cellphone, and I said, “Well we’re going to record the deposition.” I slammed it on the table and I said, “You can continue with your line of questioning now,” and of course the line of questioning ended immediately. We are, we’re there to be your advocate. Though we don’t have control, we don understand how far these types of questions can be pushed.


Eric: That was great. I think I was reading an [Ikle 00:10:54] summary or something of depositions a couple weeks earlier, and that stuck out. It’s such a hidden little rule. I mean, I can’t imagine many people know of that rule, that you’re allowed to pull out your phone and audio record so you can catch the tone, because a written transcript won’t reflect the tone of how someone’s acting. What a sneaky little move, that was great.


John: There’s a hundred like that. One of my favorites is to say … And it confuses the hell out of opposing council, and I don’t even know why I do it. I’ll say things like, “Was that the question? I want to certify that question, because we’re taking that question to the judge.” Opposing council will often say, “What do you mean by certify?” I’m like, “What? You don’t know what certifying the question means? We’re certifying that question, and we’re going to take it to the judge.” They’ll get …


Eric: Every attorney’s worst nightmare of not knowing a basic rule.


John: There’s no rule, it’s completely made up, but it works.


Eric: Oh God, that’s great. I think the idea of control in a deposition is funny, because when you’re the defensive attorney, you kind of say, “Well I don’t have a lot of control over what’s being asked,” but when you’re the one asking questions, it kind of feels like you have all the control, but you can really … The person answering the question really wields a lot of power.


John: They really do, you’re absolutely right. When I tried to draft depositions, or at least an outline … You never really draft deposition questions because it’s really off the cuff. When I try to think about deposition questions, I try to feed questions that have yes or no answers so that you can box somebody in almost like a computer. If you were feeding a set of questions to a computer, and the computer gave you yes/no questions, and it branched in a certain way, and it could only branch in that way, that’s the idea of a deposition. Of course it never goes like that.


Eric: No, it never goes the way you think it’s going to go. You never get the answers that you want, or hope to get. It always goes in a completely different way, and when we were preparing for this podcast, we were watching some of these videos of the celebrity depositions, and they do a great job of showing what it’s like to really control a deposition as the deponent. These guys are killing these attorneys. I mean they cannot get a question out, or answer it, or anything. It’s just because they don’t care, they have enough money where they don’t really care, but it’s amazing to see them completely control the setting.


John: Yeah, my favorite’s Lil’ Wayne, because Lil’ Wayne just doesn’t care. He just sits back, and we’ll drop this in the show notes, but they asked him a question about whether he was in jail, and he’s like, “I don’t know, you tell me, was I in jail? When was I in jail? I don’t know.”


Eric: It’s so good, because attorneys are just so used to being somewhat in control, and just seeing these people come in and acting like they’re sleeping, and not caring. Bieber’s objecting to questions being asked to him. It’s so funny, I just crack up at these. Yeah, there’s the Lil’ Wayne deposition, Bieber, Pharrell. These are all really entertaining, and we’ll put them all in the show notes.


John: Yeah, definitely. The Bieber one’s the best because he says, he gets asked the question, “Do you know Selena Gomez?” And he says, “Don’t you ever ask me about her.” Then somebody asked him, do you know … I can’t remember what Usher’s real name is, it’s like John Usher or something like that, he’s like, “Do you know John Usher?” And Bieber says, “Never heard of him,” and then the guy says, “Do you know Usher?” He was like, “May have heard of him.”


Eric: Maybe, sounds familiar.


John: Yeah.


Eric: It’s great. The idea of being in control as the deponent is something that I think, if you’ve never been in a deposition, it would seem like you wouldn’t have that control, but like the Bill Clinton thing, you do. You can kind of set the tone of how things are going to go, you can really be difficult. I’m not saying being difficult is always a good idea, you know it can really come off bad, too, because this trial, this deposition transcript, could come into trial.


It’s not like you just want to be a pain in the ass the whole time, but there are things you can do that make the other attorney go through all the steps. For one thing, don’t answer questions that weren’t asked.


John: Yeah, don’t give a narrative. That’s always the worst possible idea.


Eric: Let there be a silence. One of the most common tactics is to ask a questions, deponent answers, attorney just doesn’t say anything. Deponent feels the pressure of silence, continues talking. That’s great, because you have no idea what’s going to come out of that person’s mouth, and hopefully they say something, they’re uncomfortable, they say something that maybe is against their own interest. That’s what you want as an attorney. That trick of just not responding as an attorney and leaving that open silence, something to be aware of. As a deponent, you have to be okay with silence.


John: Absolutely. Yeah, you have to be okay with silence, you have to answer only the question that’s been presented to you. If it’s a video deposition, you have to answer in a manner that makes you look like a decent person. Even though you are playing the game, and you’re answering only the question that’s in front of you, you have to do it in a way that, if it was presented to a jury later, it doesn’t make you look like a dick, because the jury has to sympathize with you. They have to know that you’re not playing a game, or they at least have to believe that you’re not playing a game, so it’s important to be a decent person. That’s conveyed as well in the transcript if it’s not a video deposition.


Eric: Definitely. The idea of that video being played back is … It’s going to happen. It happened, I’m thinking about the Hulk Hogan issue again. I know we saw the deposition of one of the editors when they’re asking him when would he ever post, or not post a sex tape. He gave that terrible answer of, “If it was a four year old or something I wouldn’t.” It’s on video, and it’s just … That was a terrible answer, and it looked terrible on video, it looked terrible in writing. That was just nuts, I can’t imagine what they guy was thinking.


John: My favorite deposition was, I defended a deposition of one of our clients who was Russian. He spoke in Russian as his normal language, but he also spoke English somewhat poorly. He was struggling so much, but he was just so likable in his video deposition that you go back and you watch it, and you’re like, “Man, that was a great deposition,” because he answered the question that was posed, he was likable in the manner that he was doing it. He obviously was struggling because he didn’t speak English as his first language, so those combined together made him a very sympathetic witness, which I think also helped at trial for us. Yeah, I mean, be a decent person, listen to your attorney’s advice.


Eric: Yeah, it’s not all that complicated, really. I mean it’s a lot of common sense applies in these kinds of settings. It seems like this formal thing, and that you have to follow some rules, but you don’t. You just have to follow common sense, and not answering … Answering what was asked and nothing more, unless it’s going to help you or you want to kill time, then you can just kind of babble on about nonsense. Being careful not to be … To be okay with silence, to understand your mannerisms count. Some other pitfalls of depositions, I would say, guessing. Guessing at answers.


John: Yeah, any speculation is bad.


Eric: Don’t guess. If you don’t know, you don’t know. If you don’t recall, you don’t recall.


John: If it’s your opinion, say, “Well this is my opinion.”


Eric: Yeah, and these are things that should not be … You can’t let the pressure of the situation get to you, because everyone’s waiting on your answer, but if your answer is, “I don’t recall, I don’t know. This is my opinion,” then you have to say that, and don’t try to please anyone with your answer, just say the truth.


John: Yeah, and depositions will be stressful, but I think it is worth emphasizing that you’re not going to die, and relax. A lot of the strategies that opposing counsel will use … A good one, for example, is that they’ll starve you out. For example, they’ll start a deposition at 10 o’clock, you’ll go through the 12 o’clock hour, you didn’t prepare by eating in advance. Then you start to wear down and you give bad answers.


Well, tell them you want a break. Any reasonable attorney is going to give you a break. Those little things, they try to get under your skin, but again you’re not going to die. You should answer truthfully and just stay calm. The worst was watch … I had defended my Mom’s deposition a couple years ago, and it was the worst, because you go through this with a client and you think like, “Okay, well they’re doing okay. They’re a little nervous,” but when you see somebody that you lived with as a kid go through it, and you’re like “Oh my God, this setting and the questions are causing this person a massive amount of stress,” it’s like totally different. You realize how stressful depositions can be for the layperson.


Eric: Definitely. It is a lot of pressure on someone, and it’s an uncomfortable setting. Opposing counsel typically is … They’re probably a nice person outside of court, and outside of the deposition room, but they’re here to do a job, and you can feel all this pressure. I think in the long run, what you say at a deposition usually doesn’t make or break a case.


John: No, no.


Eric: It just doesn’t. Cases are complicated. Certainly it’s possible to say the wrong thing, and it closes case, but usually there’s a lot of moving parts.


John: Yeah, bad attorneys believe that they killed the case. Good attorneys aren’t truly worried about them.


Eric: Yeah, I mean it adds a piece to the puzzle, but it’s usually just one piece.


John: Let’s talk about some news. You brought to my attention that there’s a big domain name thing going on with Carly Fiorina, is that right?


Eric: Yeah, so Ted Cruz made a very, probably desperate move of announcing his running mate for president, announcing Carly Fiorina would be his running mate, his VP. What does the Internet do? They go out an buy a bunch of Carly Fiorina for Vice President domain names, and redirect them at all kind of things. I think the one article that we had shared was about directing it to a Planned Parenthood site, or something to support Planned Parenthood, which obviously both of those people are against.


It’s this kind of land rush of, “Let’s go buy up all these domains.” It shows lack of foresight by the Cruz and Fiorina campaign. These things are nine bucks, that they wouldn’t go out and buy a bunch of them is kind of stupid.


John: Yeah, it’s incredibly stupid. I mean this one, I recall a case that was handled by our good friend Mark Randazza, where the domain name was He defended that registration on First Amendment grounds. This one isn’t like that, this one is, it’s a pretty straightforward domain, it’s the one they should have grabbed.


Eric: Yeah, I mean it just shows that they did not think about this at all. I don’t know that they thought real well about this entire plan of announcing her as a VP, and her at this time, when very unclear that he is even going to get the nomination. It’s a strange move all around, this idea of just not even looking at domain names. I don’t know, it’s almost like a change, or a just disconnect, in eras or attitudes, where domain names are somehow a afterthought. I think for people of our age, that’s what you would think of right away.


John: It’s a little strange, first of all, forward to a photo of Hillary Clinton, which is hilarious, but Carly Fiorina was the CEO of Hewlett-Packard, I mean how … You’re supposed to know how to do this shit. How do you not register your domain name? You’re supposed to be an important tech CEO, well, register your damn domain name before you decide to run for Vice President.


Eric: That’s hilarious. I didn’t know this Ted Cruz … I don’t feel like this Ted Cruz domain name going to Hillary.


John: I just, I found it in my search results.


Eric: That’s awesome. Again, these people … There is another tip for people listening. Buy your name as your domain name. Just go buy it, because why not? It’s 9, 10 bucks, and if you don’t do it, the only thing that can happen is something bad, basically. No one’s going to buy your name as a domain name and put up something flattering.


John: Why don’t you tell your story? I mean …


Eric: Yeah, we had a client that had a domain name issue. We sent a threat letter to the defendant, and he responded by buying my name, by full name and my last name, as domain names, and then trying to sell them to me, which was just incredible. I didn’t take my own advice, this was two or three years ago now, and we sued him. We got a default judgment against him for quite a bit of money. I don’t know if we’ll ever collect on it. The idea of just getting a threat letter from an attorney and thinking, “I’m going to go buy his name, his domain name.” I didn’t even know that was a thing at that time.


John: It’s a very ballsy move.


Eric: It is very ballsy, and I was shocked. Now I think I bought my … I don’t think I’ve bought my son’s name yet, I have to do that.


John: Yeah, don’t say his name, someone will buy it. I already bought our daughter’s name, well two names, so yeah. Don’t say his name.


Eric: Yeah, but I mean everyone should do it. You don’t have to develop an entire website on it, but it never hurts, and it’s a kind of fun little hobby if you do something in the future. It’s out there for the taking, and if you don’t take it someone else might. Just because they register, they can register the domain, and just because it’s your name doesn’t mean you get it.


John: No, it doesn’t mean you get it. Personal names are not trademarks, its going to be difficult to get it back if you lose it, so make sure you register it. There are ways to get it back under the Uniform Domain Name Dispute Resolution Policy, and the Anticybersquatting Consumer Protection Act’s personal name provisions, but it all costs money. Just spend the eight dollars or nine dollars to go register it. Defensive registrations are always the best.


Eric: Yeah, yeah definitely. It’s so cheap, and it’s peace of mind, you might as well do it. This idea that these people are going to run our country, and run Fortune 500 companies didn’t think about that when they’re making these political campaign moves, it’s just surprising.


This whole idea of domains forwarding, and people buying them. Trump did it to Jeb, I mean this isn’t anything new. The fact that they’re still not catching on to this is, I don’t know, stupid I guess is the best way to put it.


John: Yeah, definitely stupid.


Eric: The other part of the news that we want to talk about is actually a huge, huge change in federal law that probably isn’t getting enough attention.


John: No, yeah, so this new law is the Defend Trade Secrets Act. It’s the equivalent of a new copyright act, let’s throw that out there. It’s not as big, we have had trade secret acts across the United States, through a model law called the Uniform Trade Secrets Act, which is adopted by most states in it’s actual form or in some modified form.


Congress passed the Defend Trade Secrets Act, which President Obama will sign soon. This extends the current Economic Espionage Act of ’96, which has criminalization penalties for trade secret misappropriations, but now it adds a civil remedy that’s very similar to the Uniform Trade Secret Act. It also, I’m just scrolling through it now, and it also adds a civil seizure section, where you can apply with an ex-parte application, meaning that you can apply even before the defendant has made an appearance in court, to seize property that is subject to the trade secret claim. That’s a pretty interesting remedy.


Eric: Very, yeah. It sounds like most people … I mean this is brand new, so how is this all going to work? No one knows, I mean this is totally uncharted territory. Lets talk about trade secrets. When we tell people we practice intellectual property law, we generally tell them, well there’s four main areas that falls into. Copyright, trademark, patent, and trade secret. The first three all are federal laws, and there is a federal registration process.


The trade secret, until now, has always been this weird kind of stepchild that’s not federal law, it’s only state law. You don’t actually register anything. It is an extremely valuable form of intellectual property protection, but it’s kind of amorphous. You don’t get a certificate that says, “This is a trade secret.” It’s this fourth area of IP, and now it’s being promoted up to the federal level, and federal protection. It’s a monumental change in how trade secrets will be protected.


John: It is, and there are some provisions in here that are kind of interesting. There’s one that says that “a party or person who claims to have an interest in the subject matter seized,” this is under that seizure section that I was discussing before, “can make a motion to encrypt any material seized.”


You go out there and you grab a hard drive with some trade secret material on it, and then you encrypt it. It’s really interesting, and the motion has to include the desired encryption method. There’s a lot of little things in there that must be tailored towards probably trade secret theft that’s coming out of South East Asia, I would assume.


The damages that are now available under the federal law are pretty interesting. There are damages for actual loss, there’s injunctive relief, there are damages for any unjust enrichment that’s caused by the misappropriation of a trade secret. That means that if somebody receives some benefit, there’s a way for you to recover that benefit. Then there’s also a reasonable royalty provision, much like the Patent Act, where instead of asking for actual damages, you can just request a reasonable royalty, which I’m assuming will require some analysis of, what are other people getting for this type of trade secret in the marketplace anyway?


Eric: Yeah, and what does this sound like to me? Sounds like a lot of work for attorneys.


John: Yeah, it really does.


Eric: Which is always a good thing.


John: Yeah, well it’s a good thing for us, it’s a bad thing for businesses.


Eric: Yeah, but I mean enforcing trade secrets was always when it’s relegated to state law, it makes life more difficult. Federal courts have certainly moved faster in general, I’d say. State courts you can get tied up in very long, slow litigation with courts that aren’t very sophisticated. If your federal trade secrets are spanning countries, it’s not too difficult to think about a supplier in Japan that is accessing some material from a company in Nebraska, and then that distribution agreement relationship falls apart, and now someone’s taken something that doesn’t belong to them. You don’t want to have to file in a small country court. It might not even have the resources to really be able to handle something like that.


Federal courts are a much better fit for these things, just by way of probably jurisdictional issues, sophistication of judges, and even just the resources of courtrooms, and the ability for e-filing and things like that. These are very, very complex cases that you don’t really … I think most people would probably prefer to be in federal court in these kinds of situations.


John: Yeah, I think federal court definitely is a better place for this type of litigation. State court dockets, they see so many different types of cases. Some states have gone with business courts, which is … They’ve been helpful, because they have some area of specialty, but federal courts are better suited to have the structure needed to dispose of these claims fairly quickly.


There’s a survey … I’m looking at an article that’s written by Eric Goldman, who’s a friend of ours, and he’s a professor out at Santa Clara. He cites this AIPLA report on economic survey, that the median cost for a trade secret lawsuit with a one million dollar to ten million dollar risk is 925,000 dollars, so like one tenth of the cost of the risk is going towards attorney’s fees. He makes the point that, “Yes, you read that right, a trade secret lawsuit seeking a million dollars costs almost a million dollars to litigate.”


Hopefully the federalization of this act, or excuse me of this trade secret law, will bring those costs down, and we won’t be spending as much time litigating over amorphous concepts. Who knows if that’ll actually happen, it may just increase costs, but that’s the hope I think.


Eric: Yeah I think there’s arguments that costs could certainly increase, but we don’t know. How this is all going to play out is a mystery. You can bring … Right now there’s a similar way where you can bring federal trademark infringement, you can bring state law trademark infringement, and a lot of times that happens in lawsuits. Although, because the two causes of actions are basically identical, there’s not a huge difference. I think there, because you have this patchwork of state law, there’s opportunity for some state law to be more favorable than the federal law in certain …


John: Yeah, forum shopping.


Eric: Yeah, I mean it’s certainly possible because of the way that this was set up. Trademark law just by it’s nature is going to be more uniform.


John: Yeah, I agree. I think that there is definitely a risk that people will forum shop because they’ll see that the federal law or the state law is beneficial. Also the seizure provision is just so strange that people may abuse it. They may get early injunctive relief because a court doesn’t understand what’s at risk, they don’t understand the technology, and then a company may use that to their competitive advantage to seize assets from a competitor, so it’ll be interesting to see what happens with this thing.


Eric: Yeah. Yeah definitely something on the lookout. Trade secrets is, I think, something that most companies don’t understand, don’t value, and don’t set themselves up for to protect at all. The idea of a employee, a distributor, and independent contractor, any of those people obtaining information about what makes your business special, and taking that to a competitor, is just rampant. The opportunities for that to happen are so available. If that happens to a client, they come to us and say, “That just happened. Someone took my information,” the first question I’m going to say is, “Did you have a confidentiality agreement? No? How did they get the information?” “Well, it was right here and they had access to our Google Drive file.” Then that wasn’t a secret, and it doesn’t count as a trade secret.


That is as simple as it gets. To be a trade secret, it has to be a secret. You have to take steps to maintain it’s secrecy. This isn’t overly complicated. Now when you get into litigation, it will be extremely complicated, but the start, for people just wondering what the hell is a trade secret, do I have trade secrets? Do I protect them? If you do protect them, then you have them I guess is the answer, but you have to do something to set up even firewalls within your business of, maybe sales people shouldn’t have access to patent information, or the R&D to projects that may be patented in the future. Do the patent people need really a list of all the potential distributors or customers? No, so the idea of keeping that information segregated and separate is just one very small example of how a company should probably approach who has access to what information.


John: Yeah, I think physical and nonphysical access controls are key. I was just thinking about my … Brooke and I, my wife, we were at the St. Patrick’s Day Parade in Chicago a couple years ago, and we were with some friends who are Groupon employees. I had to use the bathroom, she had to use the bathroom, so there’s nowhere to go in downtown Chicago if you’ve ever been.


We asked to go to Groupon, so they let us into the building, we left out IDs at the desk, it’s a secured environment. Then we get upstairs, and I’m sitting there in the middle of Groupon’s sales floor, and there’s computers on, and I’m just thinking to myself, “What the hell are you doing?” I’m no one, I just scaled 20 floors, I’m sitting in Groupon sales floor, I could just stick a thumb drive in here and steal some trade secrets.


Physical security is basic, it’s like exactly as you said, don’t give people the customer list if they don’t need it. Make sure you know who has the keycode to the building, simple things.


Eric: Yeah it is, and trade secrets, I think it’s an area I’ve always thought in the brewing industry. Craft beer is so big here in Michigan, and I’ve always thought trade secrets was such an important thing that breweries should do is to protect their recipes. I’ve talked to some brewers about that, and they kind of just say, “Yeah that sounds like a good idea, but it’s not going to happen.” It’s kind of like, these are chefs. A chef’s not going to agree, and if they brought that recipe with them, or whatever, they’re not going to agree to never use it again if they leave. I think common sense, although I think it would be really helpful, I think in that industry it seems like there’s kind of an unwritten rule that you don’t overly lawyer up.


John: Yeah, and that’s sad, because the litigation that we’ve been involved in is over recipes. Some brewer, chief brewer of the company leaves to go start his own thing because he’s not getting equity, and then takes some recipes with him, and the two parties end up in litigation. It’s like, “Well, you know, I know you didn’t want a lawyer, and you didn’t want to lawyer up, but now you’re going to spend a good 40,000 dollars to litigate this case.”


Eric: Yup, you’re going to spend a lot more now. Yeah, this is a huge shift in trade secret law, the country, and it’s an area that I think maybe this is a good thing, and maybe it’ll get more attention to what is a trade secret, how do I protect it? Because it’s all on you, like I said, you’re not going to get that raised seal on a piece of paper, or the gold star on it saying, “Hey, this is a trade secret.” It’s up to you to create and to maintain. It’s not difficult, but you’ve got to be methodical about it.


John: We should start a trade secret certification program. A private …


Eric: There you go.


John: Oh, and give little gold seals.


Eric: Patent pending.


John: Yup, don’t tell anyone guys.


Eric: It’s an audit of, are you doing something to maintain your trade secrets, is certainly something people should think about, and things we’ve done before. It’s nice to see companies thinking that far ahead, but yeah. This is a good thing, I’m excited.


John: Yeah I am too.


Eric: I can’t wait to litigate some of this.


John: Yeah, I love new law. I know people hate new law, but I love it, because it adds … It’s the time to make precedent, that’s what we get excited about.


Eric: Definitely, I’m excited. Well I think that’s probably our time for today’s show. If you have any questions or comments, reviews, certainly find us on iTunes, Facebook, Twitter, LinkedIn, we’re all over. Love to hear questions from you guys, even just go through our webpage and drop a line as to topics that you’ve always wondered about, or just thought you would like to hear us chime in on. Anything like that, we always appreciate your comments.


John: Yeah, and if you think we should be on Snapchat, let us know, because I just read an article that 16 to 34 year olds, 60% are on Snapchat, and I find that absolutely insane. I don’t know why, why would you do that? Tell me? If you have a reason.


Eric: I’m not on it.


John: If there’s a reason, somebody tell me why we should do it.


Eric: The only thing I’ve heard that is somewhat funny to me would be that I think people like celebrities, sports athletes, are more apt to put up funnier, kind of more risky pictures, which could be interesting. I guess we could join as a firm and you could see the mail being opened.


John: You may see who it’s addressed to.


Eric: Yeah, you could see an address here or there, you could see some file structures in our Google Drive settings. Could be some really, really cool stuff, so maybe we’ll think about that.


John: All right, well have a good week everybody.


Eric: All right, we’ll see you later.


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