Reminder on the Role of E-Records in Trade Secret Enforcement

Earlier today, an entry on Wright’s Legal Beagle blog via the Content Management Connection blog caught our attention. While the Microsoft intellectual property (IP) lawsuit these entries described was settled more than three years ago, the light that specific case shed on email authentication and IP protection are timeless and worth revisiting.

In case you aren’t familiar with the specifics of Burst.com v. Microsoft, here is a quick recap from Wright’s Legal Beagle:

Burst had held conversations with Microsoft in which it confidentially (under non-disclosure agreement) revealed trade secrets about Burst's streaming media technology. Burst later alleged that Microsoft chose to use these trade secrets without Burst’s consent, and without compensation to Burst.

So Burst sued, claiming misappropriation of trade secrets and breach of contract. During the discovery phase of the lawsuit, Microsoft was required to reveal all of its e-mail records on the topic, and Microsoft did turn over a large number of e-mails regarding its development and use of streaming technology.

And while Microsoft turned over “millions of documents and emails” related to this case during discovery, they did not produce some of the same key exchanges as Burst.com. During a 2003 interview with ZDNet UK, Burst.com’s attorney voiced his suspicions:

"Microsoft is a company that lives and dies by email -- that is how they communicate. Emails that should be there were not; for instance, there were a whole series of meetings between my client and Microsoft, and there are no emails discussing those meetings."

Unable to overcome the setback caused by the missing emails, Burst.com and Microsoft settled this suit in 2005. In this instance, Burst.com clearly won because it employed better email retention practices. While there was never any specific question about the authenticity of the electronic emails Burst.com produced during this litigation, times have changed. Courts expect more. Given the lack of confidence many organizations have with their ability to authenticate emails for use during litigation, the Burst.com v. Microsoft case serves as an important reminder that electronic records – including email – can, and will be, called into court and it raises an important question about litigation preparedness: if necessary, are your electronic records ready to serve as the smoking gun you may need to protect your organization’s intellectual property?

Posted by Stephanie on October 01, 2008 at 06:54 PM
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