Inevitable Disclosure Theory Not Available as a "Stand-Alone" Claim

Ever since the Seventh Circuit decided PepsiCo v. Redmond in 1995, there has been an almost insatiable desire for plaintiff's attorneys to apply the "inevitable disclosure" doctrine to claims of trade secret theft.

As I've written before, the doctrine serves as a proxy for actual misappropriation and is based on the idea that despite one's best intentions he cannot serve in a particular employment position without relying on specific trade secret knowledge gleaned elsewhere.

The concept is similar to a party's request for a broad manufacturing or production injunction, akin to what the court ordered in the now-famous case of E.I. duPont v. Kolon Industries. So the theory goes, if a party has incorporated a stolen secret process into its manufacturing line and cannot help but rely on that process, then a mere "use or disclose" injunction plainly is insufficient. A broader, prophylactic order prohibiting conduct related to the trade secret is necessary to protect it.

It is important to understand the limits and parameters of the inevitable disclosure doctrine. It is not a stand-alone claim for relief, as a federal district emphasized in Janus et Cie v. Kahnke, 2013 U.S. Dist. LEXIS 139686 (S.D.N.Y. Aug. 29, 2013). It is a means to obtain a preliminary injunction under state trade secret law or to demonstrate a protectable interest for purposes of enforcing a non-compete agreement.

This means, for all intents and purposes, two things. First, if a plaintiff asserts a claim based on the inevitable disclosure theory without moving for a preliminary injunction, then the claim isn't plausible. Second, a plaintiff almost certainly won't be able to obtain damages (or fees) under state trade secrets law absent some actual misappropriation.

The inevitable disclosure doctrine is a very narrow path to secure injunctive relief, and the court's stringent four-factor test to award such relief typically guards against unduly speculative, factually empty cases. On top of that, the states treat the inevitable disclosure doctrine in different ways, with some adopting what many believe to be a "pure" form of relief and others limiting the doctrine substantially or declining to adopt it altogether.