Wilt Toikka Kraft LLP


Be Mindful of Your Audience: Sharing Confidential Information with AI Programs May Lead to Claims of Trade Secret Misappropriation

AI tools like ChatGPT and Otter are increasingly utilized by employees to streamline business tasks. Otter, specifically, serves as an AI Meeting Assistant, offering real-time transcription and summarization of meetings, audio recording, slide capturing, action item extraction, and content generation such as emails and status updates. However, DC IP Lawyers advise that both employers and employees must exercise caution regarding the information shared with and potentially stored in these AI programs.

For instance, recording company meetings discussing confidential information using an AI tool, such as Otter, may trigger trade secret misappropriation claims. A recent case filed in the U.S. District Court for the District of Connecticut by two Nebraska-based technology companies, West Technology Group LLC and CX360 Inc., exemplifies this concern. The complaint alleges that a former employee, Karl Sundstrom, misappropriated trade secrets by using Otter to record and transcribe confidential meetings without consent. Sundstrom’s termination did not resolve the issue, as Otter continued to have access to the recorded information, leading to legal claims under the Defend Trade Secrets Act (DTSA) and Breach of Contract.

Under trade secret law, information must be actively kept secret and protected to maintain its status as a trade secret. However, sharing information with third-party AI programs like ChatGPT and Otter, with unknown security measures, may jeopardize its secrecy and legal protection. For example, Samsung software engineering employees’ use of ChatGPT to assess confidential source code could potentially expose the company to trade secret misappropriation claims.

DC IP Lawyers advise employers to clearly outline prohibitions on unauthorized use of AI tools for accessing or recording company confidential information in employment agreements, confidentiality agreements, handbooks, and training materials. Similarly, employees should exercise caution and obtain explicit authorization before disclosing company secrets to AI programs.

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