A lawsuit can put customer data, pricing models, source code, and confidential business methods in front of an opponent. California businesses and individuals should address that risk before producing documents or filing sensitive evidence. This article explains how protective orders, restricted access, and sealing requests can reduce exposure without preventing the other side from obtaining evidence it is legally entitled to receive.
Identify the trade secrets before discovery begins
Not every confidential document qualifies as a trade secret. Under California Civil Code section 3426.1, information must derive actual or potential independent economic value from not being generally known and must be subject to reasonable efforts to maintain its secrecy. Calling every business record “confidential” does not establish those elements.
Start by identifying the specific information at risk and documenting existing safeguards. Useful records may include:
- Confidentiality agreements with employees, contractors, and business partners.
- Access restrictions, password controls, and records of who can retrieve sensitive files.
- Policies limiting external disclosure and evidence that those policies are followed.
- An explanation of how disclosure could benefit a competitor or damage the business.
In a California action alleging trade secret misappropriation, Code of Civil Procedure section 2019.210 generally requires the claimant to identify the trade secret with reasonable particularity before commencing discovery relating to it. That identification itself deserves careful confidentiality planning.
Request a protective order for trade secrets early
A protective order establishes rules for using and disclosing information exchanged during litigation. It is different from a private nondisclosure agreement because it is a court order that can govern parties and others who receive protected material.
For document demands, Code of Civil Procedure section 2031.060 permits protective relief for good cause, including restrictions on disclosure of trade secrets and confidential commercial information. A motion under that section requires a meet-and-confer declaration. Other discovery methods have their own protective-order procedures, so the request should match the discovery involved.
California Civil Code section 3426.5 also directs courts in actions under the California Uniform Trade Secrets Act to preserve the secrecy of alleged trade secrets by reasonable means. Those means may include discovery protective orders, closed proceedings, sealed records, and restrictions on disclosure.
Discuss protection before the production deadline. An objection alone is not a substitute for obtaining an appropriate order. Counsel can assess whether to negotiate a stipulated order, request relief, or seek a temporary restriction while the court considers the dispute.
Choose access restrictions that fit the information
Effective protective-order provisions should explain who may see protected information, what they may do with it, and how disputes will be resolved. A routine confidentiality designation may be enough for some records. Particularly sensitive material may justify an “attorneys’ eyes only” designation that excludes specified business personnel.
That stronger restriction is not automatic. Courts must consider the need for secrecy alongside the opposing party’s ability to prepare its case. The proposed order should address:
- Permitted recipients: Attorneys, experts, witnesses, and other people with a demonstrated need for access.
- Permitted use: Use for the lawsuit rather than competitive, personal, or unrelated purposes.
- Expert review: Procedures for reviewing potential conflicts before an expert receives sensitive material.
- Security: Approved storage, transmission, copying, and deposition procedures.
- Designation disputes: A process for challenging confidentiality claims without publicly revealing the information.
- Case completion: Return or destruction requirements, with appropriate exceptions for retained legal records.
Overbroad designations can create unnecessary disputes. Match the restriction to the actual disclosure risk.
A protective order does not automatically seal court filings
Discovery protection and public access to court records are separate issues. A document produced under a confidentiality order does not automatically become sealed when attached to a motion. A confidentiality agreement between the parties is likewise insufficient by itself.
For records subject to California Rules of Court, rule 2.550, sealing generally requires express findings that an overriding interest overcomes public access, supports sealing, and faces a substantial probability of prejudice without sealing. The requested sealing must also be narrowly tailored, with no less restrictive means available to protect that interest.
Rule 2.551 sets out procedures for requesting sealing, including lodging records conditionally under seal. Counsel should determine which rules apply to the particular filing; the rules treat certain discovery records differently from records used at trial or to decide substantive matters.
Plan before filing. Consider a public redacted version and a properly supported request covering only the sensitive portions. A protective order should explain the filing process, not suggest that confidentiality labels replace judicial approval.
Coordinate protection throughout the case
Trade secret exposure can occur during depositions, expert exchanges, hearings, and trial—not just document production. Identify sensitive exhibits in advance, establish procedures for confidential testimony, and discuss whether courtroom restrictions are necessary before the information is presented.
California Evidence Code section 1060 recognizes a trade secret privilege, subject to limits where allowing the privilege would tend to conceal fraud or otherwise work injustice. It is not an absolute right to withhold relevant evidence. Depending on the dispute, controlled disclosure may be more appropriate than refusing disclosure entirely.
Coordinate legal strategy with the people who maintain company systems and records. Preserve potentially relevant evidence while limiting unnecessary access, and avoid deleting material in the name of confidentiality. Itkin Law’s business litigation services include evaluating discovery obligations and requests for protection. The objective is to support the case while reducing unnecessary disclosure.
Talk to a California business attorney
If a lawsuit may expose your confidential business information, a free consultation can help identify the discovery and filing issues that need attention. Schedule a free consultation or call (424) 603-8888.
This article is attorney advertising and provides general information only. It is not legal advice and does not create an attorney–client relationship. The law changes, and this article reflects the law as of its publication date. Every situation is different — contact us to discuss how the law applies to your exact circumstances. See our full disclaimer.
