Georgia Court of Appeals Discusses Anti-Severability Rules

One of the defining characteristics of a state's non-compete law is its application of the blue-pencil rule. Although several variations of the rule exist, states generally fall into one of two camps: those that readily modify overbroad covenants to make them reasonable, and those that generally frown on modification or blue-penciling.

Georgia historically has been one of the states that enforces only those agreements that are reasonable as written. That is to say, courts cannot modify overbroad agreements to make them enforceable. In essence, Georgia judges will decline to force the parties to accept a contract they could have, but didn't, make.

Georgia law continues to evolve, and a new statute governs contracts entered into after May of 2011. However, it doesn't impact contracts signed before the effective date, and courts will continue to apply the old common law for many years to come.

The Court of Appeals discussed at length the state's anti-severability rule in Lapolla Industries, Inc. v. Hess. As the Court described, the anti-severability rule applies to the following types of restrictive covenants:

• covenants restricting employment or competition generally in a relevant market;
• covenants restricting the solicitation of business from actual or potential customers; and
• covenants restricting the acceptance of business from actual or potential customers.

(There was another type of restrictive covenant at issue in Hess, which I still don't understand after reading it several times and which the Court of Appeals intelligently glided over. Lapolla (the ex-employer) had a non-solicitation covenant that prohibited the employee from soliciting or accepting business from a business competitive with or similar to Lapolla. In other words, the employee could not vend any kind of product or service to a Lapolla competitor. Silly.)  

However, the anti-severability rule does not apply to covenants that either:

• restrict solicitation or hiring of certain employees or independent contractors; and
• restrict disclosure of trade secrets or confidential information.

Like many states, Georgia historically has frowned upon so-called market-based restraints, which contain broad prohibitions on working for a competitor in any capacity. Georgia's case law, however, also has applied strict scrutiny to lesser restrictive customer-based restraints, such that a number of appellate decisions strike down clauses that many other states would deem enforceable. For instance, Georgia courts have frowned upon customer-based restraints that prevent an employee from accepting, instead of soliciting, a customer's business. This distinction never has made much sense to me, since it's virtually impossible without the aid of legal process to determine who solicited whom.

The Court also discusses at length in Hess Georgia's reluctance to enforce choice of forum and choice of law clauses in contracts when application of a foreign state's law would lead to a result contrary to Georgia's public policy. In keeping with one of my sacrosanct rules to limit discussion of venue and jurisdiction disputes to an absolute minimum, I will say no more regarding this subject.

Even Reprehensible Terms of Service Violations Do Not Yield CFAA Claim

Although the Computer Fraud and Abuse Act frequently has been described as extremely broad in reach, it's also important to recognize its limitations.

One of the most substantive, sweeping limitations involves potential violations of website "Terms of Use" or "Terms of Service." Largely as a result of the case law that has developed out of the Ninth Circuit Court of Appeals, courts have recognized that pursuing a CFAA claim (or prosecuting a CFAA crime) on the basis of TOS violations poses significant problems.

The CFAA, somewhat famously, prohibits access to a protected computer without authorization or (critically) in a manner that "exceeds authorized access." Shoehorning a TOS violation into the "exceeds authorized access" framework has caused a great deal of handwringing among academics, prosecutors, defense attorneys, and judges.

The most well-known case involved Lori Drew, the MySpace Mom who created a fake account to contact a 13-year-old girl with whom her daughter was friends. The girl later committed suicide after corresponding with a person she thought to be a 16-year-old boy, the identity Drew assumed online with the fake account. After the U.S. Attorney's Office prosecuted Drew under the CFAA for a TOS violation, the district court judge threw out the conviction and held that the CFAA - as applied in the case - was void for vagueness. (Professor Orin Kerr represented Drew in this case.)

A similar dust-up ensued in an Oregon middle school recently, when a number of students created fake Facebook and Twitter accounts under the name of their assistant principal, Adam Matot. The students would then invite children to be friends with "Matot", and upon receiving an acceptance of the invitation, they would send the children obsene material (including pornographic images).

Matot's grievance, however sympathetic, simply did not state a CFAA claim for many of the same reasons the government couldn't maintain a conviction against Drew. The TOS violation, under Ninth Circuit law (Matot filed suit in Oregon), was not enough to demonstrate that the children exceeded their authorized access to a computer, since that statutory term restricts only access to a protected computer - not the misuse of information contained within the protected computer.

It is important to remember what function website terms of service play in commerce. As Professor Kerr mentioned in testimony before the U.S. House of Representatives, "[c]ompanies write those [TOS] conditions broadly in part to avoid civil liability if a user of the computer engages in wrongdoing....Those terms are not designed to carry the weight of criminal liability."

The same analysis generally will apply to civil claims involving the CFAA. In a majority of federal jurisdictions, courts will look at whether an individual had permission to use a protected computer in the first place and will not focus on whether the individual's use of information was wrongful.

Aleynikov Turns the Tables on Goldman Sachs Group

Score one for the underdog.

In Sergey Aleynikov's latest legal battle against Goldman Sachs, he emerged victorious. Earlier this month, Aleynikov prevailed on summary judgment and obtained an advancement (that is, prepayment) of legal fees related to his legal defense of state criminal charges brought by the Manhattan District Attorney.

As many readers know, Aleynikov was convicted by a federal district court of violating the Economic Espionage Act related to his alleged theft of Goldman's trade secret high-frequency trading source code. The Second Circuit reversed that conviction - after Aleynikov spent many months in federal prison before the reversal - leading to a quick modification of the federal statute.

Soon thereafter, a grand jury in New York indicted Aleynikov on similar state charges. It's unclear what the DA hopes to accomplish since even if Aleynikov is convicted, he will receive credit for extensive time he served in the federal case. But, now at least, Aleynikov will be able to have Goldman advance his legal fees and forge a defense to the latest round of criminal charges.

Although Judge McNulty called the advancement question a close one, there are several lessons to be learned.

First, the advancement and indemnification rights afforded corporate officers and directors are broad in scope. To that end, any ambiguities are resolved in the indemnitee's favor. Here, although Aleynikov was not an "officer" in the traditional sense (as would be the case for Lloyd Blankfein), the court found Goldman reserved for itself broad discretion to determine who was eligible for fee advancement. In fact, Goldman had advanced fees to 51 of 53 people who applied for it (apparently, one other unlucky soul found himself viewed as equivalent in stature to Aleynikov) over a six-year period.

Second, rights to advancement require an analysis of state corporation law, corporate bylaws, and any governing agreements (such as employment contracts). Advancement rights are treated differently by the states, and often times states make distinctions between officers, directors, and employees. In some states, for instance, a corporate charter must opt-out of advancement for directors, or else it's mandatory. Goldman's corporate bylaws, mandated advancement to officers as long as certain conditions were met.

Third, the key analysis usually turns on whether an individual is a defendant "by reason of the fact" that he was an employee, officer, or director. This is usually where advancement cases turn, although in Aleynikov it wasn't the flash point at all. In Delaware (which most states will turn to for interpretive questions), this requires a court to consider the nexus or causal connection between the alleged wrongdoing (whether civilly or criminally based) and the individual's status. In Aleynikov's case, his theft of trade secrets occurred solely because of his access to them while he was a Goldman employee. To be sure, the act of misappropriation occurred before he quit. Therefore, Aleynikov wouldn't have been able to misappropriate the code (or understood his value) but for the exercise of his official duties as a Goldman employee. Several other courts have found improper pre-termination competitive activity (usually for trade secrets theft or violation of a fiduciary duty) as sufficient to establish the "by reason of the fact" test. Individual obligations arising after service ends, such as a non-compete violation, won't fall within the causal nexus and won't trigger advancement rights. (For this reason, it's exceedingly important for a plaintiff to consider the implications of its allegations and sought-after remedies.)

Simply because Aleynikov is entitled to fee advancement does not mean he is off the hook. If he loses and is found guilty by a Manhattan jury, he'll have to repay his fees - hence, the title "advancement." But he doesn't have to post security as a condition. Advancement is an unsecured undertaking (unless the corporate charter says otherwise), and it's hard to see where Aleynikov would ever have the practical ability to repay if things head further south.

A copy of Judge McNulty's lengthy advancement opinion is contained below.

Aleynikov - SJ Opinion on Advancement (00180447).pdf

Inevitable Disclosure Theory Not Available as a "Stand-Alone" Claim

Ever since the Seventh Circuit decided PepsiCo v. Redmond in 1995, there has been an almost insatiable desire for plaintiff's attorneys to apply the "inevitable disclosure" doctrine to claims of trade secret theft.

As I've written before, the doctrine serves as a proxy for actual misappropriation and is based on the idea that despite one's best intentions he cannot serve in a particular employment position without relying on specific trade secret knowledge gleaned elsewhere.

The concept is similar to a party's request for a broad manufacturing or production injunction, akin to what the court ordered in the now-famous case of E.I. duPont v. Kolon Industries. So the theory goes, if a party has incorporated a stolen secret process into its manufacturing line and cannot help but rely on that process, then a mere "use or disclose" injunction plainly is insufficient. A broader, prophylactic order prohibiting conduct related to the trade secret is necessary to protect it.

It is important to understand the limits and parameters of the inevitable disclosure doctrine. It is not a stand-alone claim for relief, as a federal district emphasized in Janus et Cie v. Kahnke, 2013 U.S. Dist. LEXIS 139686 (S.D.N.Y. Aug. 29, 2013). It is a means to obtain a preliminary injunction under state trade secret law or to demonstrate a protectable interest for purposes of enforcing a non-compete agreement.

This means, for all intents and purposes, two things. First, if a plaintiff asserts a claim based on the inevitable disclosure theory without moving for a preliminary injunction, then the claim isn't plausible. Second, a plaintiff almost certainly won't be able to obtain damages (or fees) under state trade secrets law absent some actual misappropriation.

The inevitable disclosure doctrine is a very narrow path to secure injunctive relief, and the court's stringent four-factor test to award such relief typically guards against unduly speculative, factually empty cases. On top of that, the states treat the inevitable disclosure doctrine in different ways, with some adopting what many believe to be a "pure" form of relief and others limiting the doctrine substantially or declining to adopt it altogether.

So, What Is a "Solicitation"?

One of the most frequently asked questions I get when advising clients is deceptively complex:

What does it mean to solicit a client?

On its face, this probably sounds like it should be an easy question to answer. However, it's really not. Since courts are hesitant to enforce broad non-compete agreements (particularly as to sales persons), many disputes hinge on the applicability of a customer non-solicitation covenant. The scope of those covenants can range from the very broad to the much narrower, both in terms of the type of activity prohibited and the customers covered by the prohibition.

A broad non-solicitation covenant reads something like this:

Employee agrees for a period of one year not to solicit, contact, or provide services to a Restricted Customer for the purpose of providing Competitive Products.

A narrow non-solicitation covenant usually reads this way:

Employee agrees for a period of one year not to solicit or entice away a Restricted Customer for the purpose of providing Competitive Products.

The difference between the two is that the narrow covenant does not prohibit so-called "passive" solicitation, where a client reaches out to the employee. As a practical matter, these more narrow covenants lead to just as much litigaton because most times an employer won't know who contacted who. But it will justifiably be concerned about the fact the employee is continuing to work with the client. It only will be able to discover what actually happened through the litigation process.

In these cases involving narrower covenants, the issue of breach often hinges on whether the employee actually solicited the customer, or whether the customer sought out the employee. The First Circuit's recent opinion in Corporate Techs., Inc. v. Harnett illustrates a common fact-pattern and rejected a bright-line "initial contact" test. In that case, the ex-employee's new company sent out a blast announcement that piqued the curiosity of a targeted group of customers that happened to fall within the terms of the employee's non-solicitation covenant. Upon receiving that announcement, customers started contacting the ex-employee.

The court specifically noted that "initial contact" is somewhat amorphous and "can easily be manipulated" depending on the facts of a particular case. This is particularly so with businesses where the selling cycle is long, such that the initial contact would be "unlikely to bear fruit in the absence of subsequent solicitation." It had little trouble affirming a preliminary injunction that enforced the non-solicitation covenant.

The takeaway from cases like Harnett is that employees must understand that the issue of "solicitation" is intensely fact-laden and that it's awfully hard to play cute and end-run the contract. Courts will need to consider how employees typically communicate with customers, and whether the employee set in motion a chain of events designed to lead to contact by the customers themselves. Targeted announcements are an obvious invitation to cause a customer to contact the employee and present a fairly easy case for determining that a solicitation has occurred. Even more problematic are personal e-mails, LinkedIn invitations to connect, and other one-on-one activity that suggests an effort to continue a business relationship.

Corporate Techs v. Hartnett - Opinion by Ken Vanko

Illinois Supreme Court: Fifield Stands

When the Appellate Court of Illinois ruled in Fifield v. Premier Dealer Services, Inc. that an
employer needed to provide consideration beyond mere employment itself to validate a non-compete, most business (read: management-side) attorneys thought this decision was a misread that was inevitably headed for reversal.

Not so.

The Supreme Court of Illinois has denied the Petition for Leave to Appeal that Premier Dealer Services filed after Fifield prevailed on his consideration argument. Anyone following this blog knows I have been critical of the Fifield holding to the extent it applies broadly to employees who choose to leave their employment voluntarily and in its rather arbitrary setting of a two-year period in which an employee must remain employed for the employment itself to constitute sufficient consideration for the non-compete.

But now that Fifield stands, what impact will this have? Here's several implications:

(1) Venue fights are inevitable. The Appellate Court has five districts. The First (from which Fifield hath sprung) is by far the largest and includes Cook County. However, many employers operate in other counties that are both nearby and outside the First District. Look for employers to enforce covenants outside Cook County and include choice-of-venue clauses in contracts that get them out of the First District.

(2) A potential conflict may be looming. I have heard stories of employers in other districts (namely, the Fourth - generally viewed as the most friendly towards enforcement) setting up lawsuits to create a conflict with Fifield. It will be worth watching if an employer has a suit disposed of quickly to get it to the appellate court and potentially create a district split. This would enhance the chances for the Supreme Court to take a case, much like it had to do with Reliable Fire Equipment Co. v. Arredondo a few years back.

(3) Employers will look to rewrite their agreements. Now that the consideration rule effectively grants at-will employees the opportunity to void their non-competes for a two-year period after the start of employment, employers are scrambling to fix contracts. My experience is that this new decision may mean employers will create contracts that contain consideration in the form of: (a) a guaranteed term of employment; (b) a severance or garden-leave option triggered post-termination; or (c) a signing bonus that is irrevocable.

(4) Some legislator will introduce something in January that addresses this. (Note: This is not a real implication because most proposed legislation never goes through committee, and this wouldn't generate any attention at all. At least that's my opinion.)

For several years, the playing field in non-compete suits was whether the employer had a legitimate business interest to protect. Now, it will be the question of contract formation entirely - whether the employer ever provided enough consideration to make the non-compete enforced at all.

Old Georgia Law Still Invalidates Many Restrictive Covenants

When the Georgia General Assembly passed the Restrictive Covenant Act in 2009, it substantially changed the playing field between employers and employees. Under the common law, it was exceedingly difficult for employers to enforce anything but the most perfectly worded and narrowly tailored covenant. Cases repeatedly failed on the facial ambiguity or overbreadth of the covenant, leading to judicial invalidation. And the blue-pencil rule was not available to save overbroad (even slightly overbroad) contracts.


But the new Act did not become effective until 2010 and only applies to contracts entered into after November 3, 2010. A great many employees and independent contractors signed agreements well before that, and their enforceability continues to be subject to the old common law.

A recent district court summary judgment decision illustrates how strict this old common law actually is.  The case involved a dispute in the credit-card merchant processing industry. This is a rapidly growing market where companies provide merchants - often, retailers - a wide range of credit-card processing services. Those services range from simple payment processing to mobile processing to "tokenization" (a fancy way of saying that the processing company will enable merchants to store credit card data safely and securely).

The defendant was an independent contractor who marketed the processor's services to merchants for a fee. In his Independent Contractor Agreement, he agreed to two broad covenants:

(1) An in-term non-compete restriction that prohibited him, during the term of his relationship with the plaintiff, from entering into agreements to solicit merchants for the merchant-acquiring program of any bank or third-party financial institution, or from entering "into any relationship with any organization...that would effect an indirect relationship with any" organization.

(2) A 5-year, post-termination non-solicitation restriction that prevented him from calling on the plaintiff's customers, regardless of whether he had a relationship with those customers.

The district court had little trouble under Georgia common law striking down both clauses. The ruling on the non-solicitation covenant was not much of a surprise, since Georgia law (like some other states) generally does not look favorably upon non-solicitation covenants that extend to customers the employee did not serve - particularly when there is no geographic restriction. And the 5-year term was well beyond the 2-year rule Georgia courts long have advocated.

The more surprising aspect of the ruling is the fact the court struck down the in-term non-compete arrangement. It held the general rules pertaining to non-compete agreements apply, even though it did not prohibit any post-termination activity. In-term covenants rarely are litigated because in an at-will environment, employees (or, as here, independent contractors) simply terminate the relationship before leaving to compete.

The court, though, struck the non-compete and held that its activity scope was unreasonable - mainly due to the quoted, italicized language above. The court found that the prohibition on the defendant from entering "into any relationship" with a bank was ambiguous and ill-defined. In reality, it didn't appear to be as broad as the court held. Rather, it seems the clear intent of the covenant was to prohibit the defendant from entering into a similar arrangement with another credit-card processor while he was soliciting merchants for the plaintiff. The language of the non-compete which the court deemed problematic only appeared to further restrict the plaintiff from circumventing this fairly clear covenant in a more indirect manner.

Still, the ruling indicates that courts often are troubled by restrictive covenants and their impact on competition as a whole. I've written before about how judges sometimes will gloss over a contract's intent to find an ambiguity, even though it's questionable such an ambiguity exists. That seems to be what happened here as well.

Inevitable Disclosure Doctrine Inapplicable to Contract Damage Claims

As readers of this blog may know, the "inevitable disclosure" doctrine is a theory of trade secrets misappropriation.


A plaintiff need not show either actual or threatened misappropriation if it can prove that it's inevitable a defendant either will use or disclose trade secrets. In many competition cases, a plaintiff asserts an inevitable disclosure claim in tandem with breach of contract claims. For remember that most employees who join a competitor (and who are worth the expense of a lawsuit) probably have some sort of non-disclosure agreement.

This raises the issue of whether a plaintiff can use the inevitable disclosure doctrine to prove breach of contract. There are relatively few cases that seem to address the issue, although the logical answer seems to be "no." The better way to apply the inevitable disclosure doctrine is to use it as a means to seek preliminary injunctive relief, as a recent Arkansas federal district court did.

In Nanomech, Inc. v. Suresh, the court rejected the plaintiff's effort to extend the inevitable disclosure doctrine to a breach of contract claim for damages, stating:

"The doctrine has only been applied in Trade Secrets Act cases, particularly where plaintiffs have alleged the 'threatened misappropriation of trade secrets,' a discrete violation of the Act that is inherently speculative in nature."

When asserting a claim for damages, it makes little sense to use the inevitable disclosure doctrine. Damages presume that some wrong already has occurred and caused an economic loss. If disclosure of trade secrets is merely "inevitable," then it's illogical to conclude the plaintiff incurred a loss. By definition, the wrong would not have occurred. Rather, the only use for the doctrine would appear to be securing injunctive relief.

This raises a related issue. Many times a non-disclosure covenant will be written in such a way as to bar a threatened disclosure of confidential information. In this circumstance, a plaintiff - faced with imminent disclosure - probably doesn't need to wait until actual breach and can instead sue on the contract. However, it's easy enough to just allege a violation of the contract, along the lines of anticipatory breach, for pleading purposes. Too, until such time as there is an actual disclosure, a plaintiff's request for a remedy should be limited to an injunction.

Dumb Settlement Comments Can Help Establish Bad Faith in Trade Secrets Case

There's a perception that anything written in a settlement letter is privileged.

This perception is decidedly wrong.

Offers of settlement are not admissible to prove liability because we want to encourage parties to resolve their disputes out of court. If those offers were admissible, then parties would be hesitant to mediate disputes. This is a simple, common-sense rule. But that rule doesn't give a party carte blanche to say whatever it wants in a settlement letter and then hide under the cloak of privilege.

As readers of this blog know, trade secrets disputes can go horribly wrong for plaintiffs, my case of Tradesmen International v. Black from the Seventh Circuit being a recent example. But because of the overly emotional nature of competition cases, plaintiffs frequently double down when litigation goes south. It is quite common, in fact, for trade secrets plaintiffs to make outrageous settlement demands, or ridiculous statements in a settlement letter, even in the face of a significant defeat.

Those plaintiffs better be careful what they say in settlement letters, however.

If those letters contain over-the-top missives, improper threats, or even pie-in-the-sky demands, the statements aren't privileged and can help establish bad faith. Remember: a defendant gets his attorneys' fees if he can prove a plaintiff brought or maintained a trade secrets misappropriation claim in bad faith.

So what kind of statements in a settlement letter are not privileged? Generally, I find there are two categories that get plaintiffs in trouble.

First, the plaintiff often makes comments about how much continued litigation is going to cost, or indirect references to the fact that an appeal is going to be expensive for a prevailing party to defend. These sort of threats aren't privileged because even an idiot lawyer knows that further litigation costs money, and it's completely disconnected from an offer of settlement. Threatening a defendant into spending further legal fees indicates the plaintiff simply is pursuing litigation to force its adversary to bear the burdens of litigation - not to achieve a specific result at judgment.

Second, the plaintiff may make irrational demands as part of a settlement term sheet - often times totally disconnected to the actual dispute. In past cases (both in Iowa and California), courts have looked to outrageous settlement demands that have nothing to do with trade secrets claims as evidence of subjective bad faith. For instance, demanding a broad non-compete in California (where non-competes are unenforceable) as part of a settlement would demonstrate bad faith intent. So, too, would damages demands far in excess of a trial disclosure and demands to avoid certain customers or product lines, even though this is not part of the relief sought in the complaint. Even though these are terms of the offer, they aren't privileged as settlement communications because they don't tend to establish the plaintiff's case is worth less than what it claims.

Settlement letters are potential land-mines in litigation. If a trade secrets plaintiff says anything beyond conveying the offer, those statements could help show bad faith. As with most letters, it's best to keep it short and to the point.

Do the Final Episodes of "Breaking Bad" Qualify As Trade Secrets?

For die-hard fans of the greatest TV show of all time, these next six weeks are absolute gold.

Which led me to think: Do the plot lines over these final eight episodes qualify as "trade secrets"? Put another way, if one of the show's insiders - an actor, a writer, a key grip - published the final episodes' general plot narrative (online or in an interview), would the owners of the show - AMC - have a claim for trade secret misappropriation?

As many readers probably know, the test for determining a trade secret is relatively straightforward. An owner must show both: (a) that the information is economically valuable because of its secrecy; and (b) that it instituted reasonable security measures to protect the information.

So let's apply this to the final episodes of Breaking Bad and see if we can answer this question.

Economically Valuable Information

One argument weighing against trade secret status for the final episodes is that the information - that is the scripts and plot - are valuable as much for their novelty as for their secrecy. Secondarily, one could argue that the viewers would watch Breaking Bad even if the ending were either known or easily predictable. With this, I would disagree.

As to the first possible contention, every television show has some degree of originality, and as great as Breaking Bad is, it's not necessarily novel. After The Sopranos, it's hard to call a serial drama featuring a disaffected, criminal white male as "novel." In fact, it seems that virtually every new iteration of prestige television has such a protagonist (except, perhaps, for Orange Is the New Black).

So, since the series is not "novel," the argument for granting the last eight episodes trade secret status strengthens. That leads to the second possible argument against trade secret status: would people watch regardless of the ending? From my point of view, there are two key factors that indicate the story derives great value from its ability to hold its ending secret.

First, the show's true calling card from the beginning has been the parlor game begging viewers to speculate about the end. In other words, we know Walter White breaks bad from the first episode. Walt has cancer, meaning the show's lifespan is naturally limited. Add to the mix the compressed time frame over which the plot develops - two years' story time spread over six seasons - and the show has a frenetic, building pace that singularly drives viewers to speculate as to the ending. Since the focal point of the show always has been about the end, the plot that develops in the final season naturally has a high degree of intangible value.

Second, somewhat incredibly, Breaking Bad's viewership doubled from the last episode of Season Five to the first episode of the Season Six. This is staggering, if not ridiculous, for a serial drama that makes no sense if you jump in and start watching mid-stream. And it's due almost entirely to word-of-mouth. That is to say, those who've watched the show from the beginning have told their friends to get caught up because the end is near. Viewers of the show experience the show as much the day after it airs by reading the endless recaps and listening to insider podcasts, all of which contain a heavy undercurrent of how each episode builds towards the conclusion and what might happen in the last few episodes.

In all likelihood, 3 million new viewers have decided to watch over 50 hours of television in the past calendar year simply because the end is coming. The increased ratings for Breaking Bad likely have allowed the show to generate more advertising revenue (and possibly spin-offs for AMC), and this is mainly attributable to the fact the show is ending. Therefore, it seems logical that the narrative of the final episodes constitute some of the most valuable information about the show.

Secrecy Measures

This is somewhat of an unknown, simply because I don't know exactly what the owners of Breaking Bad have done to protect the plot details. But, from what's available in the public domain, the secrecy steps appear to be somewhat legendary.

We know from recent interviews that one of the supporting characters - "Lydia" - received scripts for the final episodes that redacted all lines but hers. We also know the scripts created by the show's writers generally contain code names (they're not labeled, for instance, Breaking Bad), ostensibly to guard against the impact of some accidental disclosure. The show has contracts with vendors that are secret and that don't reference the show at all, such that many vendors apparently don't even know they are supplying goods or services to Breaking Bad. These may seem like extreme security measures, but it signifies the show believes its ending has great value.

We also know creator Vince Gilligan will not allow previews of the coming show. That is, at the end of, say, Episode 1, we don't see scenes from Episode 2. Nor does the show preview the show in commercial spots during the week. In fact, Gilligan only will do a very short (and very oblique, to put it mildly) teaser on AMC's recap show, Talking Bad, that shows a still photo from the coming episode. His commentary is so trite as to be meaningless.

So the answer to me is a clear "yes." The plot lines for the remaining episodes qualify as legal trade secrets. But like many trade secrets, their shelf life is limited. In six weeks, all of this information will be in the public domain, and the plots lose any legal protection (except for copyright law, which is sort of besides the point for this post).

Until the final episode has wrapped, any of the show's insiders who know how it will end would be well-advised to tread lightly.

(Many thanks to Eric Ostroff for inspiring this post, based on his July entry on WWE wrestling. Eric and I reach somewhat different conclusions, incidentally.)