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Public Entities Pose Threats to Trade Secrets

When Evanston, Ill.-based Northfield Laboratories Inc. entered into agreements with the University of California?? 1/2 San Diego (UCSD) and San Diego County in 2003 to help test one of its pharmaceutical products, it never imagined that doing so would compromise its trade secrets.

The pharmaceutical company had invented a blood substitute called PolyHeme that it wanted to conduct clinical trials on. Northfield contracted the university to assist in the research while the county signed on as the patient-testing location.

Third, and most importantly when engaging in a partnership with a public entity, the company has to have exercised reasonable efforts to preserve the secrecy of the information it claims is a trade secret.

"This last element explains why companies have to be vigilant, and why they almost have to seek protective orders against a newspaper publisher," says Gary Weiss, a partner at Orrick, Herrington & Sutcliffe. "Newspapers can say all they want about prior restraint, but an injunction to stop the disclosure before it is made is absolutely necessary."

Technology Editor

Keith Ecker

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