A recent decision in the Eastern District of New York has drawn attention for its approach to handling certain proprietary assets. The court allowed a claim to proceed that a highly restricted musical recording could qualify as a trade secret. While still at an early stage, the ruling offers important insights for companies exploring how U.S. trade secret law might protect audio-visual (A/V) works in addition to traditional intellectual property tools. Below, we summarize the ruling and outline practical takeaways for those considering trade secret protection for creative works.
The Ruling in Brief
- Trade secret misappropriation claim survives dismissal: The court refused to dismiss a misappropriation claim under the Defend Trade Secrets Act (DTSA), finding it plausible that the musical work’s secrecy and exclusivity were central to its value.
- Broad statutory scope: The DTSA covers “all forms and types of business information.” The court stressed that creative works do not need to fit into traditional categories like formulas or processes.
- Secrecy matters: Allegations of physical security, restricted access, and controlled use were enough to show “reasonable efforts” to maintain secrecy at the pleading stage.
- Not a final ruling: The decision did not decide definitively whether the work is a trade secret, only that the claim is viable and can proceed.
- Contrast with earlier cases: Other courts had rejected similar claims over unreleased songs (e.g., by Prince or Janet Jackson), often concluding that unreleased status alone did not create trade secret value. This court, however, highlighted the unique business model of exclusivity and secrecy.
- Relief available: The court left the door open for both injunctive relief (to recover or destroy copies) and damages tied to wrongful gain or loss.
The ruling is significant not because it rewrites trade secret law, but because it shows judicial willingness to apply the doctrine to creative works in unconventional circumstances.
Practical Guidance from This Decision
The case underscores that trade secret protection for A/V works is not automatic—it depends on how the work is managed, marketed, and protected. Companies should evaluate whether and how their creative content could qualify if they are looking for ways to protect the content from unauthorized use.
- Confirm the Elements of a Trade Secret
- Secrecy: The work must not be generally known or easily discoverable.
- Economic value from secrecy: The value must stem from the fact that the work is exclusive, not simply from its creative quality.
- Reasonable protection efforts: Security, NDAs, restricted access, and encryption should be standard practice.
- Align Protection with Business Model
- Trade secret claims are most viable when exclusivity is part of the commercial strategy (e.g., limited release, private showings, restricted licensing).
- For works intended for broad distribution, secrecy is quickly lost, making trade secret arguments less persuasive.
- Consider hybrid strategies—use trade secret law for controlled versions, drafts, or unreleased materials, while relying on copyright and contract for public distribution.
- Invest in Strong Protective Measures
- Limit access to trusted individuals under binding NDAs.
- Employ physical and digital safeguards: locked storage, encrypted files, audit logs, watermarking.
- Document policies and enforcement consistently. Courts often focus on whether protective measures were systematic and credible.
- Be Specific in Defining the Secret
- Courts require particularity. Vague claims over “all recordings” or “all versions” will likely fail.
- Identify with precision: which cut, master file, or unreleased footage is alleged to be misappropriated.
- Segment works where possible—for instance, unreleased edits, raw footage, or metadata—to strengthen the claim.
- Understand the Copyright–Trade Secret Intersection
- Copyright protects the expression, but not the secrecy. Trade secret law fills the gap by protecting controlled access.
- Claims should be positioned to complement one another, not overlap. For example, use copyright for infringement of released versions and trade secret law for unauthorized distribution of unreleased versions.
- Focus on Remedies Early
- Injunctions to stop dissemination or compel return of copies can be critical.
- Damages must tie to either the plaintiff’s loss or the defendant’s wrongful gain. New York courts in particular require damages grounded in measurable economic harm.
- Preservation of evidence and quick legal action are key to maximizing remedies.
This New York ruling demonstrates that in certain circumstances a creative work like a musical recording may qualify as a trade secret and may signal judicial openness to applying trade secret principles beyond traditional business information.
