In Seyfarth’s third webinar in its series of 2017 Trade Secrets Webinars, Seyfarth attorneys Justin Beyer, Marcus Mintz, Dean Fanelli, and Thomas Haag focused on how to define and protect trade secrets in the pharmaceutical industry, including: reviewing significant civil and criminal cases in the industry, discussing how federal and state trade secret statutes and decisions may impact the protection of trade secrets, and suggested best practices for protecting trade secrets from invention through sale.

As a conclusion to this well-received webinar, we compiled a summary of takeaways:

  • Trade secret laws cover any information which is confidential, kept confidential, and from which the owner derives economic benefit. In order to maintain such protections, owners must be vigilant and proactive about maintaining the secrecy of their trade secret information. One of the ways in which employers should do so is to update their employment agreements to comply with the immunity notice provisions of the Defend Trade Secrets Act, without which the employer may lose the ability to recover attorney’s fees or double damage awards.
  • In the pharmaceutical and biotechnology space, companies should also take active steps to develop internal guidelines and protocols for the identification and protections of information that may be the subject of trade secret protection, whether that information is related to research and development, strategic business plans, or future opportunities and trends. These steps include, but are not limited to: (i) advising all employees of the confidential and proprietary nature of their work; (ii) limiting access to proprietary and confidential information to only those employees requiring such information; (iii) actively monitoring how information is distributed both internally and externally; and (iv) regularly updating employees of the necessity to maintain confidentiality of all information.
  • Trade secrets are particularly valuable with respect to the development of biologics. Given long clinical development timelines, composition patents covering reference biologics may be about to expire or will have already expired, at time of marketing approval. Confidential and proprietary details relating to reference protein drug production, isolation, storage and delivery; as well as its post-transnational modifications, are at least as important to know as the identity of the reference protein’s amino acid sequence, when creating a biosimilar. Thus these trade secrets represent potentially enormous barriers to market entry for third party developers of biosimilar versions. They should, therefore, be kept in the strictest confidence.
  • If a company does, however, find itself in a situation in which it fears that an employee has or may misappropriate its trade secret information, it should take certain immediate steps, including: (a) reminding the employee of his/her obligations; (b) forensically imaging and reviewing the employee’s email communications, downloading history, and/or internet activity; (c) cutting off the employee’s access to company confidential information, as soon as notice is provided that the employee is taking a position with a competitor; and (d) if necessary, filing suit to recover and protect the secrecy of the trade secrets. Once trade secrets are disclosed in public, whether properly or improperly, it becomes exceedingly difficult to prove the ongoing secrecy of the information and even harder to put the secret back in its box.