Ringing in the New Year provides a unique opportunity to reflect on the past and look ahead to the future. This mirrors the day-to-day reality for legal practitioners: the future is shaped by precedent from the past. And in these early days of 2016, with the possibility of a federal trade secrets law looming in the proposed Defend Trade Secrets Act, it’s important to understand the tensions and limits surrounding trade secret law.

This February marks the ten-year anniversary of the Seventh Circuit’s Hicklin Engineering, L.C. v. Bartell decision in 2006, in which the court made clear the importance of public scrutiny of the judicial system. The court noted that its precedent “insisted that litigation be conducted in public to the maximum extent consistent with respecting trade secrets….” Quite often the need for judicial transparency is at odds with trade secret protection, as information is a trade secret only so long as it is not disclosed to the public. Nonetheless, the appellate court reprimanded the lower court for sealing two judicial opinions in a trade secret case.

The sealed decisions came before the Seventh Circuit when Hicklin Engineering appealed the ruling and Bartell cross-appealed for additional attorney’s fees. Neither party raised the issue of the sealed opinions on appeal. However, the three-judge panel at oral argument demonstrated that it was “seriously troubled” by this issue. Determining that the sealed opinions did not contain any information that Hicklin claimed as a trade secret, the Seventh Circuit ordered the clerk of the court to place the district court’s opinions in the public record. The court further warned the lower court: “We hope never to encounter another sealed opinion.”

Judicial transparency is an indispensable component to the legitimacy of the legal system. As the Seventh Circuit noted, “[a]ny step that withdraws an element of the judicial process from public view makes the ensuing decision look more like fiat and requires rigorous justification.” The bar seems to be set pretty high when it comes to finding exceptions to the principle of judicial transparency. The court pointed to instances where the Supreme Court published an opinion involving state secrets and a district court issued a public opinion involving construction plans for hydrogen bombs.

Although trade secret cases often present strong arguments in favor of sealing, the information that is kept from the public record must be limited to maintain a balance between these competing interests. So when it comes time to ask the court to seal something from public eye, trade secrets owners should be careful not to use a machete where a scalpel is needed.

Finally, the creation of a federal right of action under the DTSA may lead to greater consistency in the way confidential and trade secret information is treated in litigation. Although there is plenty of debate to be had about the proposed law, moving trade secrets law from a hodgepodge of state and local rules of civil procedure that currently govern most cases to the Federal Rules might be a step in the right direction.