Advance Technology Consultants, Inc. (ATC), contracted with RoadTrac, LLC, to provide software and client software systems for the products of global positioning satellite (GPS) technology being developed by RoadTrac. RoadTrac agreed to provide ATC with hardware with which ATC’s software would interface. Problems soon arose, however, and RoadTrac filed a lawsuit against ATC alleging breach of contract. During discovery, RoadTrac requested ATC’s customer lists and marketing procedures. ATC objected to providing this information because RoadTrac and ATC had become competitors in the GPS industry. Should a party to a lawsuit have to hand over its confidential business secrets as part of a discovery request? Why or why not? What limitations might a court consider imposing before requiring ATC to produce this material?

Answer and Explanation:

Customer lists and marketing procedures are considered trade secrets. Since the dispute here is over a defective product issue and not a marketability issue, there is really no reason for the customer and marketing information to be relevant and subject to production in the litigation. Roadtrac's position as a direct competitor of ATC gives it the ability to interfere with ATC's business contracts if given the information. Accordingly, the court will likely either strike Roadtrac's request for the information as irrelevant to the litigation or will limit RoadTrac's ability to use the information and confine it to the parameters of the litigation with any actual contact of ATC customers by RoadTrac for marketing purposes or any implementation of ATC's marketing procedures by RoadTrac subjecting RoadTrac to sanctions.

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