In contrast to patent and copyright law, which are exclusively federal, trade secrets are protected both by state and federal law. As a result, the details of the applicable state laws differ, but there are broad commonalities. Some states define a trade secret as “any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” Others, following the Uniform Trade Secrets Act define it as any “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, 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; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
Similarly, the Federal Defend Trade Secrets Act, 18 U.S.C.§§ 1839 et seq., defines a trade secret as “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if: (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.”
A trade secret is misappropriated where someone with a duty to trade secret holder, such as an employee, partner, or agent, violates that duty, or where improper means were used to access the trade secret. Improper means include theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. A trade secret is not misappropriated when a competitor reverse engineers a product, independently develops the same technology, or lawfully acquires the information.
Trade secrets lawyers can help evaluate whether something is a trade secret and whether it has been misappropriated. If you believe that you may have a trade secret claim, please contact Jonathan Rotter or Kara Wolke.