I have worked on multiple theft of trade secrets lawsuits where it is apparent that the plaintiffs never took the time before filing their case to identify their trade secrets. This was not fatal to the plaintiffs’ cases, but it did have ramifications. For example, because the plaintiffs never created an inventory list of their trade secrets, they did not have a precise plan in place to protect the trade secrets from disclosure to competitors. Access to the trade secrets was not strictly limited to those who needed access to perform their jobs. Those employees who did have access had not signed confidentiality agreements specifically tailored to protect the trade secrets. Instead, the plaintiffs relied upon their general business practices, confidentiality clauses in employment agreements and employee handbooks as evidence of the plaintiffs’ reasonable efforts to maintain the secrecy of their trade secrets.
It seems self-evident that it is easier to protect a secret if you know what you are trying to protect. Continue reading
This post continues the discussion from my last post regarding common mistakes that can cause a loss of trade secrets. To qualify as a trade secret, information must be the subject of reasonable precautions to maintain secrecy. This rule applies beyond the procedures that the trade secret owner follows outside of the courthouse. Parties to lawsuits also need to be careful not to waive their trade secrets by publishing the trade secrets in open court.
As we approach and move into a new year, I will write a few posts about common mistakes that can cause a loss of trade secret status. The beginning of a new year is a good time to think about ways that we can do better and avoid mistakes.
In my last post, I discussed whether data maintained in a cloud storage or computing platform can be said to be confidential. This is important because the Texas Uniform Trade Secrets Act requires the owner of a trade secret to undertake reasonable steps to maintain the confidentiality of the trade secret. I am not aware of a reported case opinion analyzing how to satisfy that requirement for data stored in the cloud. Therefore, we do not yet know whether Texas courts will require a user of cloud storage or computing services to take extra precautions to protect the secrecy of their trade secrets. Nevertheless, because encryption is a relatively easy solution to the problem of cloud service providers having the ability to access or disclose their customers data, it strikes me as a smart business practice to take advantage of that solution. Continue reading