January 26, 2016 Articles

Delaware's Two Courts for Trade Secrets and Restrictive Covenants

Known nationally for their corporate expertise, Delaware's business courts are also well suited for trade secret and restrictive covenant cases

by C. Malcolm Cochran IV, Steven J. Fineman, Selena E. Molina, and Nicole K. Pedi

Delaware is known for its robust litigation in the field of corporate governance, generally arising from transactions among some of the country's largest and most well-known companies. But Delaware also has become a forum of choice for litigants seeking to protect a variety of intellectual and competitive interests, including trade secrets, restrictive covenants, and confidentiality agreements. Delaware offers parties in such disputes two sophisticated trial courts: a court of equity, the nationally recognized Delaware Court of Chancery, and its parallel law-court option, the Delaware Superior Court.

While the Court of Chancery invokes thoughts of breach of fiduciary duty and other stockholder suits, it will devote the same formidable judicial resources to trade secrets cases. Expedited proceedings before experienced and business-savvy judges, without a jury, are the norm. Enforcement of noncompetition and confidentiality provisions also can be quickly obtained, and preliminary relief is frequently granted, where warranted.

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