In my first post on Trade Secrets, I wrote that a trade secret is information that has commercial value, is not generally known, and is the subject of reasonable efforts to keep it secret. So, you ask: what are “reasonable efforts” to maintain secrecy, and how much secrecy is really required?
As a general rule, courts consider the following factors:
1. Are there written confidentiality agreements or nondisclosure agreements (not only with key employees, but also with outsiders who may have occasional access to the information)?
2. Is confidential information kept somewhere that is generally closed and off-limits? Are the doors locked? Are visitors required to sign in, and are they prevented from accessing confidential information?
3. Is access to the information limited to employees who need it? Do the authorized employees wear identification badges?
4. Are employees notified that the information is confidential? Are they given periodic warnings and reminders (e.g., “loose lips sink ships/chips/careers”)?
As you will see, there is no one-size-fits-all answer to the question of whether a company is taking reasonable steps to maintain the secrecy of its trade secret information. The issue is very context-specific; each case turn on its own facts and circumstances.
For example, in Rockwell Graphics Systems, Inc. v. DEV Industries, Inc., Rockwell sued a competitor that had been founded by one of Rockwell’s former employees. DEV and its founder argued that Rockwell could not possibly be considered to have exercised reasonable efforts to maintain the secrecy of technical drawings for replacement parts for its printing presses when thousands of its parts suppliers had the drawings....
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