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Trade Secrets
University of Florida School of Law
Rowe, Elizabeth A.

Trade Secrets – Rowe – Spring 2017
What is a trade secret?
Anything that is useful in a business as long as it is kept secret
Policies underlying trade secret law
Commercial morality
Regulating business ethics; make companies play fair
Fairness is double-edged
Prevent industrial espionage
Finding out what competitor does is okay to certain extent. There is a line that crosses into espionage.
Protection for innovation
Encourage formulation and promulgation of ideas
Does it in opposite way of patent law
Sharing of knowledge
Can choose to share info with others whom we trust based on promise of confidentiality, knowing that the court system will intervene if necessary.
Protecting commercial privacy
Notion that companies and businesses have privacy right
A most fundamental human right applied to businesses – much broader than individual right
Mobility of labor
To what extent does the protection of intellectual property limit the right of mobility of employees
Free competition
Preserves access to info that is generally known and in the public domain
Exception to the “anything useful” baseline assumption
Cannot use improper means to acquire another’s info
Can have same trade secret as long as it was not improperly acquired
Beginning in Torts
Restatement of Torts sec 757 cmt. B
May consist of any formula, pattern, device or compilation of info which is used in one’s business, which gives him an opportunity to obtain an advantage over competitors who do not know or use it…
Much more restrictive view of what trade secret can be; only something you were actually using (continuous use in operation of business)
MA and NY still follow restatement
UTSA sec 1
Information, including a formula, pattern… that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means…
Reasonable efforts to maintain secrecy
Modern view of trade secrets
47 states and DC adopted it
NC statute is similar, but not officially adopted
Model for trade secret protection for rest of the world
Restatement of Unfair Comp. sec 39
Info that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others
Not nearly as much force as UTSA
Trade Secret Fundamental Concepts
Qualifying Info
Secrecy
Value
Reasonable Efforts
Del Monte v. Dole
Del Monte used MD-2 variety of pineapple; Dole bought that variety from Costa Rican producer
Court:
Must specify exactly what aspects are trade secrets (with particularity)
Dismissed without prejudice for lack of specificity
Religious Technology Center v. Netcom
Erlich put Church of Scientology writings on the internet
Case concerns status of info as religious text
Excluded as religious text?
No categorical exclusion
Secrecy
Members to whom info was disclosed signed confidentiality agreements
Not about number of people, it’s about conditions they are under
Value
Yes, independent economic value
Reasonable Efforts
Yes
Court
Inadequately defined what was a secret; not enough specificity
Altavion v. Konica Minolta
Whether or not ideas can be protected and under what circumstances
Altavion created printing system that authenticated documents with barcod

If an “extra element” is required instead of or in addition to the acts of reproduction, performance, distribution or display, in order to constitute a state-created cause of action, then there is no preemption
TS has element of breach of confidentiality
Not totally equivalent; qualitatively distinct
Shrink Wrap Licenses
Many come with stipulation that user cannot reverse engineer product + other agreements
Problematic from TS perspective – gets around rule that TS can be reverse engineered
Relationship With TM Law
Normally no conflict; TM doesn’t protect info or inventions
Can have slight overlap when protecting methods of marketing
Peggy Lawton Kitchens, Inc. v. Hogan
PL had secret cookie recipe; kept recipe locked in PL’s son’s desk
Hogan worked for PL and used master key to gain access to recipe; later opened own bakery and used PL recipe
Court
Basic ingredients common to any cookie are public knowledge
Particular combinations, proportions, and baking process can be a protected formula
Elements of originality also support TS protection (e.g. nut dust)
Cookies are the same; Hogan acquired by improper means
UTSA sec. 1
Info.. that derives independent economic value… from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use