Friday, March 03, 2006, 3/03/2006 08:22:00 AM

Trade Secrets and Arbitrability (Pacer Req'd)

From the Northern District of Texas, VDV Media Corporation v. RELM Wireless, Inc., 2006 WL 462436 (N.D.Tex. Feb. 27, 2006), a case between two wireless communications companies concerning the arbitrability of a trade secrets claim.

The parties entered into a Independent Representation and Assumption Agreement ("IRA") which contained a confidentiality provision and an arbitration clause. When plaintiff sued in Texas state court, defendant removed and sought to compel arbitration.

With respect to the trade secrets claim, the court held that the obligation to maintain trade secrets arose out of the IRA and therefore was arbitrable. The court rejected plaintiff's argument that because the trade secrets claim could "stand alone" in the absence of the IRA it was therefore not subject to arbitration. Instead, the court held, but for the duty in the IRA there was no duty to keep the claimed information secret.

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