E-Discovery: tool of industrial espionage!

E-Discovery: tool of industrial espionage!

e-discovery is just a more sophisticated form of industrial espionage during litigation involving any kind of successful business in the competitive marketplace.
Many attorneys advising business organizations have been concentrating on how to comply with e-discovery requests rather than how to limit them.
Rule 502(d) of the Federal Rules of Evidence which provides that by agreement between counsel—time-billing lawyers of course—if privileged information is unintentionally revealed during e-discovery, it cannot be used against the parties is not enough protection for sensitive data about business planning and operations much less trade secrets, intellectual property and industrial and manufacturing processes.

The changing character of discovery

The way discovery is conducted has changed dramatically as a result of advances in optical character recognition, search software, and expert systems which permit clerical workers to parse almost any document in any language. Image search tools are fast becoming no less successful in identifying the visual elements of photographs, maps, mechanical drawings, and other graphic material.
A survey conducted by an e-discovery service provider which asked 22 judges a host of questions about e-discovery in their courtrooms, shows that many federal District Court trial Judges and the Magistrate Judges who generally supervise discovery believe that many attorneys lack the legal and technical subject-matter knowledge they need for e-discovery and that many do not know enough about the process to counsel clients properly in this area.

More data means more discover and more risk

The amount of electronically stored information produced during litigation has grown dramatically over the last few years. It is apparent that the almost exponential increase in the amount of electronically stored data and new forms of data storage ranging from the older “thumb drive” technology to newer high capacity—terabytes and more—mobile devices makes advising clients during e-discovery increasingly complex.
Social media use by Company employees up through top management and companies themselves compound the problem of inadvertent disclosure of sensitive material. Cloud storage managed and maintained by third-parties not subject to control by the Company which is supposed to “own” the data further complicate matters and extend the scope of potential e-discovery issues almost without limit.
The many third-party vendors who are expert in collecting, sorting, and delivering your data in compliance with broad sweeping e-discovery requests are not about to help you and your company limit the amount of data and information you are required to produce during the discovery phase of litigation.

Civility, yes; cooperation, perhaps

Judges and Magistrate Judges are demanding “cooperation” between and among adversaries on resolving discovery issues during litigation. They do not appreciate being called upon to decide discovery issues. Many of them sincerely believe that the broad discovery which might lead to production of “admissible” evidence promoted by the Federal Rules promotes efficiency in litigation and speeds the trial process. This is not true in practice, however.
The policy of the federal courts permitting lengthy and intrusive discovery of data and information about a Company without regard for whether it is relevant and material to the specific subject matter of the litigation has helped destroy much of the competitive advantage of United States business and industry in the world marketplace.
The years of technical discovery about IBM during the unsuccessful efforts of the Justice Department to prove anti-trust violations allowed first the computer industry in Japan and later Taiwan to eventually drive American manufacturing of computer hardware offshore.

Prepare for e-discovery before the need arises

The time for a company to prepare for e-discovery is long before any litigation begins by developing defensible e-discovery policies. Any Company which does not have a well disciplined electronic record-keeping and data maintenance policy with a program of strict enforcement is inviting their competitors into their boardrooms, executive suites, laboratories, and shops with a universal passkey—a summons and complaint in a federal lawsuit.
Only a skilled barrister with substantial experience in litigation involving complex issues of business operations and technology can advise a Company on where to look for and how to protect important data and information which may become subject to discovery during litigation. The time to defend your data is before the first discovery demand arrives

Counsel have a non-delegable duty to protect Company data and information

Judges and Magistrates are telling attorneys that early cooperation is important for moving the e-discovery process forward. From the point of view of the Court that is certainly reasonable, however, litigation is not arbitration and Judges and Magistrates are not mediators. Litigation by its very nature creates an adversarial relationship between parties which will eventually play out in the Courtroom during the trial of the issues on the merits. A Company and its management must never forget that in every lawsuit, there is a winner and a loser.
Every Company must insist that any attorney it retains is committed to protecting Company data and information particularly during litigation. Counsel must be prepared to vigorously oppose discovery requests which are nothing more than “fishing expeditions” or more often thinly disguised attempts at business intelligence gathering and industrial espionage. Any attorney who counsels cooperation in the face of e- discovery demands does not really understand the nature of litigation and the risk to the Company from such “cooperation.”