The Departing AI Product Director

Question 6: The Departing AI Product Director

Your role

You represent LexCore, a litigation-software company considering an emergency action against a former product director and his new employer.

Governing law

1. Information is a trade secret when it derives actual or potential economic value from not being generally known or readily ascertainable and the owner uses reasonable measures to preserve secrecy.

2. Reasonable measures are evaluated in context. Perfect security is unnecessary, but ordinary business confidentiality cannot be established solely by describing information as confidential after a dispute arises.

3. Misappropriation includes acquiring a trade secret through improper means or using or disclosing it without consent when the person knew or should have known of a duty to maintain secrecy.

4. Copying information while technically authorized may still breach contract or confidentiality duties. Under the applicable computer-access statute, however, misuse of information obtained through valid access is not unauthorized access. Access after credentials are revoked is unauthorized.

5. Threatened misappropriation requires concrete evidence of likely use or disclosure. Inevitable disclosure alone is insufficient.

6. A twelve-month customer non-solicitation restriction is enforceable only as to customers with whom the employee had material contact and only to the extent reasonably necessary to protect legitimate relationships.

7. A customer’s initial contact does not automatically defeat solicitation. The question is whether the former employee actively encouraged or induced the customer to move business.

8. A noncompetition restriction unrelated to the sale of a business is void in this jurisdiction.

9. A temporary restraining order requires likely success, likely irreparable harm, a favorable balance of hardships, and consistency with the public interest.

10. Emergency forensic relief must be proportionate. A court should avoid unnecessarily exposing the new employer’s legitimate confidential information.

11. Destruction of relevant evidence after a preservation duty arises may support sanctions. An adverse inference requires intent to deprive.

Facts

LexCore develops software for analyzing litigation evidence. Its product director, Adrian, resigned to join Evidentia, a direct competitor.

Two days before resigning, Adrian copied approximately 80 gigabytes from his LexCore laptop to an encrypted external drive. The copied directories included:

• Public statutes and court rules.
• Product roadmaps.
• Customer usage statistics.
• Pricing models.
• Internal model-evaluation datasets.
• Feature-ranking experiments.
• Customer renewal forecasts.
• A customer-contact spreadsheet.
• Publicly available court documents enhanced with LexCore’s internal annotations.

Adrian says he routinely copied files to work from home because LexCore’s remote connection was unreliable. The company permitted remote work but prohibited use of unapproved external storage.

Approximately 400 LexCore employees could access the product roadmap. The evaluation datasets were limited to 32 employees. Customer usage and renewal data were limited to approximately 70 employees.

LexCore required confidentiality agreements, annual security training, and password-protected systems. Some internal links had no expiration date. Documents were inconsistently labeled. Former employees’ access was sometimes disabled several days after departure.

Adrian’s access was scheduled to end at 5:00 p.m. on his final day. At 5:08 p.m., a cached credential was used to download fourteen files concerning LexCore’s next product release. Adrian says an automated synchronization process caused the downloads and that he did not know his credentials had been revoked.

After receiving a cease-and-desist letter, Adrian erased the external drive. He says he did so because it contained personal tax and medical records and because he believed LexCore already possessed every company file. A forensic report indicates the drive was deliberately wiped using secure-erasure software.

Adrian signed confidentiality and twelve-month customer non-solicitation agreements. He did not sign a noncompetition agreement.

Three LexCore customers contacted Adrian after his move. Adrian responded to each. He told one customer:

“You should see what Evidentia is launching. It solves the workflow problem LexCore kept postponing.”

That customer later moved part of its business to Evidentia.

Six weeks after Adrian joined, Evidentia announced a feature similar to one on LexCore’s confidential roadmap. Evidentia has produced development records showing it began work on the general feature nine months earlier. Several technical choices in its final product resemble experiments reflected in LexCore’s evaluation data.

Evidentia states that Adrian has no access to LexCore-derived files and that it established a clean-room protocol. The protocol was adopted two weeks after Adrian started. Adrian became Evidentia’s product lead immediately upon joining.

LexCore wants an order preventing Adrian from working on competing products, barring release of Evidentia’s feature, imaging Evidentia’s systems, and prohibiting contact with all LexCore customers.

Assignment

Analyze:

• Which categories of information likely qualify as trade secrets.
• Whether LexCore’s protections were reasonable.
• Misappropriation, threatened misappropriation, breach of confidentiality, customer solicitation, and unauthorized-access claims.
• The significance of the initial authorized copying and the 5:08 p.m. downloads.
• The evidentiary meaning of Evidentia’s preexisting development work and later clean-room protocol.
• The consequences of wiping the external drive.
• Whether LexCore can prove irreparable harm.
• Which requested restraints are likely overbroad.
• The strongest defenses available to Adrian and Evidentia.
• The risk that an unsuccessful emergency application could damage LexCore strategically.
• The most defensible scope of temporary relief, forensic examination, expedited discovery, and settlement.
• Whether LexCore should seek a temporary restraining order immediately or pursue a narrower course.

Q6 key (Departing Product Director)

1. Trade-secret status: evaluation datasets, feature experiments, renewal forecasts, and pricing models qualify; the 400-person roadmap is weaker but arguable; public statutes and court documents do not, annotations possibly aside. Missed: overclaiming poisons the emergency application.
2. LexCore's measures are adequate overall despite sloppy offboarding; do not concede the reasonable-measures element. Missed: threshold unnecessarily lost.
3. The pre-departure copying breaches contract and confidentiality but is not unauthorized access under supplied rule 4; the 5:08 p.m. post-revocation downloads are the unauthorized-access claim. Missed: the statutory claim is aimed at the wrong conduct.
4. The secure-erase wipe after the cease-and-desist is the case's power fact: spoliation with intent indicators supporting adverse-inference leverage and credibility destruction. Missed: the best leverage goes unused.
5. Threatened misappropriation must rest on the wipe, the 5:08 downloads, the immediate product-lead role, and the technical resemblances, not on inevitable disclosure, which supplied rule 5 forbids. Missed: TRO denied on a doctrinal error.
6. Requested relief is overbroad in three places: barring Adrian from competitive work contradicts the void-noncompete rule; barring Evidentia's release fails on causation given the nine-month development record; a no-contact order covering all customers exceeds the material-contact limit. Missed: overreach costs the motion and fees.
7. Defensible emergency package: no-use and no-disclosure order, quarantine and neutral forensic examination of Adrian's devices and accounts (not full Evidentia imaging), targeted non-solicitation of material-contact customers, expedited discovery. Missed: winnable relief traded for a losing wish list.
8. Posture: seek the narrow order or a stipulated equivalent now; the solicitation claim proceeds against Adrian for the pitched customer. Missed: delay or overreach, each independently damaging.