Trade Secrets

Question 1

Trade Secret

Answer 1

A trade secret is any type of knowledge that is not generally known and is not readily available through legal means, if the knowledge gives its owner a competitive advantage over rivals who do not have the knowledge.

Question 2

A few examples

Answer 2

A few examples of knowledge that is eligible for trad esecret protection include detailed customer information that is not easily available to others, manufacturing processes, chemical formulas, operating and computer software.

Question 3

Trad Secrets traditionally

Answer 3

They were protected by common-law principles (as emobdied in the Restatement of Torts), but in recent years 45 states and the District of Columbia have adopted the UTSA.

Question 4

What do you need to successfully bring a trade secret misappropriateion case?

Answer 4

A plaintiff must prove:

1. ) the information actually was a trade secret
2. ) the plaintiff had maintained reasonable measures to protect secrecy and
3. ) the defendant improperly acquired, used, or disclosed the trade secret information

Question 5

Factors that decide whether or not a piece of information is a trade secret:

Answer 5

1. ) The extent to which information is or is not known outside the company
2. ) how easy or difficult it would be for someone to independently develop the information or to acquire it properly
3. ) the value of information to the company
4. ) the amount of time and money it took for the company to create the information
5. ) how well the company has protected the information

Question 6

Factor 5 of trade secrets

Answer 6

treated by most courts as a separate requirement for trade secret protection, but the extent to which the company has maintained secrecy is also closely related to the initial question of whether there is a trade secret at all.

Question 7

Metallurgical v Fourtek, Inc.

Answer 7

the court concluded that a company’s combination of improvements to a furnace using a zinc recovery method for separating and recycling expensive carbide from scrap metal was a trade secret even though each individual improvement was not.

Question 8

Trade Secret as a solution

Answer 8

When a trade secret consists of the solution to some problem, it is not just the final results of a knowledge-development effort that are protectable. In many such cases, most of the time, money, and effort are expended in running into blind-alleys; a lot of the knowledge gained is in the form of figuring out what does not work.

Question 9

A prototypical example of a trade secret

Answer 9

formula for Coca-Cola.

Question 10

The requirement for reasonable security measures closely resembles a requirement that the owner not be negligent in protecting this intangible property.

Answer 10

1. ) How valuable is the information?
2. ) How much yould additional protective measures cost?
3. ) How much would additional security efforts interfere with employees’ ability to do their jobs?
4. ) How much additional protection would extra security measures actually provide?

Question 11

Misappropriation

Answer 11

Conduct obviously will amount to misappropriation if it is independently illegal, such as bribery, burglary, trespassing, tapping telephones or other electronic message interception, or fraudulant misrepresentation.

Conduct may be “improper” and this constitute misappropriation, even though it is not illegal by itself.

One of those common forms of misappropriation is the breach of a duty of confidentiality. An obligation to keep information confidential and to not use it for any purpose than to benefit the ownercan be express or implied.

Question 12

Two methods of acquiring trade secrets that are not misappropriation.

Answer 12

First, if someone else develops the same knwoledge on its own, there is no misappropriation.

1. ) the information is found in a produce
2. ) someone else lawfully acquires the produce and reverse engineers (disassbles and works backwards) to disocver the trade secret. If the technology is patented, using it is patent infringement no matter how the knowledge is acquired.

Question 13

New York courts have considered the following factors to be relevant:

Answer 13

1. ) the extent to which the information is known outside of his business
2. ) the extenet to which it is known by employees and others involved in his business
3. ) the extent of measures taken by him to guard the secrecy of the information
4. ) the value of the information to him and his competitors
5. ) the amount of effort or money expended by him in developing the information
6. ) the ease of difficulty with which the information could be properly acquired or duplicated by others.

Question 14

EEA (Economic Espionage Act)

Answer 14

makes it a federal crime to steal trade secrets. The primary concern of COngress was trade secret theft by agents of foreign companies of governments, but the law applies to everyone, including US nationals.

Prosecutors must prove not only that the purloined information was a trade secret but also a.) that the defendant knew the information was a trade secret b.) that the defendant intended to provide an economic benefit to a person other than the rightful owner and c.) that the defendant intended to injure the owner of the trade secret.