Alaska Comm. R. Evid. 508
The trade secret privilege "fosters the public interest by encouraging technological advancement, encouraging innovativeness in business methods, and facilitating freedom of employment by assuring an employer that a former employee cannot reveal secrets to a competitor." 2 J. Weinstein & M. Berger, Weinstein's Evidence Paragraph 508 [02] (1979). Nevertheless, there are dangers in the recognition of such a privilege. Disclosure of the matters protected by the privilege may be essential to disclose unfair competition or fraud or to reveal the improper use of dangerous materials by the party asserting the privilege. Therefore, the privilege exists under this Rule only if its application will not tend to conceal fraud or otherwise work injustice. See Comment, Cal. Evid. Code § 1060 (West).
The term "trade secret" is not defined by this rule. By definition it is limited to knowledge, skill or the like relating to a trade or business--kept confidential by the trade or business for purposes of obtaining or retaining a competitive advantage. One useful definition of a "trade secret" describes it as
"any formula, pattern, device or compilation of information which is used in one's business and which gives [the holder] an opportunity to obtain an advantage over competitors who do not know or use it."
4 Restatement of Torts § 757, Comment b at 5 (1939). Such definitions present a danger that the privilege will be confined too narrowly, whereas "both policy and logic suggest a broad concept including all business data which gives a better competitive position and whose value is substantially enhanced by secrecy." 2 J. Weinstein & M. Berger, Weinstein's Evidence ¶ 508[03] (1979). See also 8 Wigmore §2212(3). It must always be kept in mind however, that this privilege is not absolute; whenever any injustice will result from its innovation, the privilege will not be recognized.
In many commercial cases, the need for the trade secret will be obvious and the key issue will not be whether the information will be disclosed but under what conditions. "The most common technique is to take testimony in camera with perhaps a requirement for sealed records. This preserves secrecy while allowing the court to reach a decision on all the facts. Other methods involve appointing a master to determine the relevancy of the trade secret to the issues of the case and the degree of disclosure necessary, appointing an independent expert, revealing the trade secret only to the judge or trial examiner, omitting the trade secret from the record of the case, and disclosing to the opposing party's attorney but not to his client." 2 J. Weinstein & M. Berger, Weinstein's Evidence Paragraph 508[03] (1979) (footnotes omitted). The choice of which protective device (or combination of devices) to use lies with the trial court.
Usually, the problem of trade secrets will first arise during the pre-trial discovery stage. The pertinent discovery rule is Rule 26(c) of the Alaska Rules of Civil Procedure, which allows the court to issue a protective order " . . . . to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: . . . . (7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way . . . ." The language of Rule 508 was deliberately chosen to be congruent with Rule 26(c) (7). While the instant evidence rule extends the underlying policy of the discovery rule into the trial, the difference in circumstances between the discovery stage and trial may well be such as to require a different ruling at the trial.
Alaska Comm. R. Evid. 508