UPS Involved in Tough Trade Secrets Suit in Georgia

Earlier this month, UPS brought a trade secrets case in Georgia federal court.  UPS alleges that 5 unknown people—at least some of whom are UPS pilots—distributed a strategic PowerPoint presentation meant for senior UPS executives on the internet. These actions, UPS alleges, violated both the Defend Trade Secrets Act and the Georgia Trade Secrets Act.  This case has already received local news coverage.[1]

It’s early days, but here are four reasons this is a tough suit for UPS.

  1. UPS doesn’t know who the defendants are.

Right now, the defendants may or may not be employees.  Or only some might be.  This causes at least two problems.  First, employees have legal duties, contractual obligations, or both—as shown by UPS’ attaching its code of conduct.  Third parties typically don’t.  The activity that would make a complete stranger liable for trade secret misappropriation would have to be much worse—perhaps even outright theft—to create liability for a third party.

Second, personal jurisdiction might be an issue.  If some of the defendants only accessed the presentation on the internet, they might lack the necessary connection to Georgia needed for UPS to sue them in Georgia.

  1. Showing value of the presentation and reasonable steps to protect a presentation will be hard.

To show the court that the presentation was a trade secret, UPS will have to answer many questions, both about its general information practices and, specifically, how it treated this presentation.  The following questions may arise.

Are employees free to copy information off of work computers or does the company limit personal email access, access to Dropbox, or use of computer data ports? Does UPS label anything as “confidential or “trade secret?”  Has UPS inventoried its trade secrets, and, if so, is the presentation or its contents in that inventory?

Perhaps unlike many presentations, does the PowerPoint have information specific enough to be valuable?  How big was the audience for the alleged August 30, 2017 meeting? Who was in the audience? All employees? Anyone outside of company?  Was the PowerPoint labeled confidential? Did the attendees to the presentation sign non-disclosure or confidentiality agreements? Did the pilots?  How specific was the direction to keep this PowerPoint, versus general presentations, secret? Was there anyone in the audience that had no reason to know what was in the PowerPoint? Were there password or physical access limitations to the PowerPoint? Was the presentation given on UPS property?  Could people access the presentation anywhere, including at home or a coffee shop?  Is there an access or distribution log for the PowerPoint?  Who determined access or distribution and how? Though perhaps unlikely, is the PowerPoint copyrighted?

Finally, beyond having to satisfy the court about its own practices, UPS faces an additional hurdle because it is a public company.  Public companies have many public reporting requirements and must keep shareholders generally informed about their plans.  How much of the PowerPoint has been revealed to shareholders or, otherwise, in public disclosures, or, perhaps, even in the press?  Could an intrepid reporter have backed into the information in the PowerPoint by researching earnings calls, public statements, trade journals, or industry gossip?

UPS’ complaint does not try to answer all of these questions.  As a first step, UPS has attached its Code of Business Conduct to the complaint.  Though helpful, this document is too general to be anything other than a starting point.  The document makes statements like, “We comply with UPS business security practices that protect confidential and/or proprietary information [and] also take steps to limit access to our facilities and vehicles to authorized individuals.”[2]  And the document’s only reference to trade secrets is to “trade secret technology (such as computer software and Systems. . . .”[3]  The document also references other documents, such as UPS privacy policies, not attached to the complaint.

Indeed, what the complaint does indicate may be unhelpful in answering the questions.  The complaint does not make clear how the PowerPoint got onto the internet, which suggests that tracking and monitoring could be improved.

  1. Damages will be hard to prove.

Damages are always hard to prove in a trade secrets case.  That’s why many companies satisfy themselves by seeking an injunction to stop someone else’s conduct.  But damages here—especially large damages—may be even harder to prove.  The complaint focuses on one PowerPoint presentation that does not seem to be tied to any specific product.  How much is it worth to know about a company’s strategic plan?  How firm were those plans? Are the defendants potential competitors?  What’s that strategic plan worth after it’s leaked?  These are all hard questions that UPS may need to answer.

Finally—and practically—even if UPS proves damages, it still has to collect them.  The unknown defendants are all, apparently, individuals who may have no money.

  1. UPS does not seem ready to ask for an injunction.

Instead of or in addition to damages, most trade secret plaintiffs ask for injunctive relief such as a temporary restraining order or a preliminary injunction immediately.  UPS has not.

Granted, UPS has acted quite quickly—having apparently only found out about the leak a few weeks ago.  So perhaps UPS has not sought injunctive relief because it is still working on its—internal or external—forensic investigation.  Indeed, UPS has sought immediate discovery in the case. Yet an ongoing internal investigation may mean creating evidence during an ongoing lawsuit—always tricky to manage.

An ongoing investigation may also be the reason UPS has not submitted anything under oath yet.  Making factual statements at the beginning of a trade secrets case—where the facts often change—can haunt a party later on.

Perhaps UPS’ real motive is to simply preserve civil claims while cooperating with a criminal trade secrets case.

Whatever the reason, not asking for immediate relief may make a judge think that UPS has not been severely harmed.

All that said, more facts will come out, and claims or allegations will get more precise.  For example, breach of duty claims seem likely against any of the defendants that are UPS employees.  At bottom, this is the first round of a multi-round fight.

[1] See, e.g., CBS46, UPS reeling after trade secrets leaked, available at (last visited October 24, 2017).

[2] Doc. 1-1, at 17.

[3] Doc. 1-1 at 18.