With the spreading use of cloud computing and storage services, I foresee courtroom battles over whether anything users maintain in the cloud can qualify as a trade secret.\u00a0 I have not yet seen a published court opinion addressing the issue, but it is only a matter of time.<\/p>\n
Here is the issue.\u00a0 Texas (and 46 other states) adopted the Uniform Trade Secrets Act.\u00a0 To qualify for protection as a trade secret under the statute, the owner must have undertaken \u201cefforts that are reasonable under the circumstances to maintain its secrecy.\u201d\u00a0 When the owner of the would-be-trade secret moves the data from the owner\u2019s computer servers onto servers owned by a third party, the information is arguably no longer \u201csecret.\u201d\u00a0 This is because the cloud service provider will have possession of the information.\u00a0 Unless the service provider enters into an agreement to keep customer data confidential and to not use the data for the service provider\u2019s own purposes, the information is no longer secret in the strictest sense of the word.<\/p>\n
Unfortunately for the customer of cloud services, the service provider does not always undertake obligations of confidentiality and non-use.\u00a0 The most commonly used cloud service providers offer multiple categories of service and the protection promised to the customer differs by the category.\u00a0 Not surprisingly, business customers sometimes receive preferential treatment.<\/p>\n
The terms of service that apply to Dropbox\u2019s, Amazon\u2019s and Google\u2019s cloud storage and computing services are discussed below.\u00a0 Scroll down to the service that interests you.\u00a0 Here is my conclusion after reviewing the service providers\u2019 contracts:<\/p>\n
The terms of service governing cloud data storage and computing services often do not place an obligation upon the service provider to protect the confidentiality of customer data and not to use the customer data.\u00a0 Some of the largest customers of cloud services have the clout to negotiate confidentiality restrictions into their contracts.\u00a0 The rest of us who are stuck with the standard terms of service should undertake steps to maintain the confidentiality of our trade secrets even when they are stored on cloud servers.<\/p>\n
My next post will discuss a way to do this \u2013 encryption of computer data.<\/p>\n
<\/p>\n
Dropbox Terms of Service for Non-Business Users<\/strong><\/a><\/p>\n These do not obligate Dropbox to protect the confidentiality of the customer\u2019s data.\u00a0 The terms of service include a broad disclaimer stating that the customer takes Dropbox\u2019s services on an \u201cas is\u201d basis.<\/p>\n Dropbox\u2019s general privacy policy <\/a>authorizes Dropbox to share customer information with third parties working with Dropbox \u201cto help [Dropbox] provide, improve, protect and promote [its] Services.\u201d\u00a0 This grants Dropbox authority to allow a third party to access customer data even if the access is not necessary for Dropbox to provide its services to the customer who owns the data.<\/p>\n <\/p>\n Dropbox for Business Agreement<\/strong><\/a><\/p>\n Customers of Dropbox\u2019s \u201cfor Business\u201d services are in a better position.\u00a0 The terms of service warrant that Dropbox will use industry standard measures to protect against unauthorized access to customer data.\u00a0 As noted above, however, Dropbox\u2019s privacy policy permits Dropbox to grant some third parties access to the Customer\u2019s Data.<\/p>\n <\/p>\n Amazon Cloud Drive Terms of Use<\/strong><\/a><\/p>\n These terms of use do not place an obligation upon Amazon to maintain customer data in confidence.\u00a0 The contract states that Amazon\u2019s use of customer data is subject to Amazon\u2019s general privacy policy<\/a>.\u00a0 The privacy policy permits Amazon to use any information it \u201cstores\u201d for customers to improve Amazon\u2019s \u201cstores.\u201d<\/p>\n Amazon\u2019s Web Services Customer Agreement<\/a>:<\/strong><\/p>\n Amazon put this broad disclaimer in the terms of service:<\/p>\n \u201cTHE SERVICE OFFERINGS ARE PROVIDED \u201cAS IS.\u201d WE AND OUR AFFILIATES AND LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND . . . INCLUDING ANY WARRANTY THAT THE SERVICE OFFERINGS . . . WILL BE SECURE OR NOT OTHERWISE LOST . . ..\u201d<\/p><\/blockquote>\n Amazon\u2019s AWS customer agreement does include a provision stating that Amazon will implement reasonable measures to prevent unauthorized access to or loss of a customer\u2019s data.\u00a0 Unfortunately though, that sentence may have no effect because it expressly states that it in no way limits the disclaimer quoted above.<\/p>\n The contract also states that Amazon shall have no liability for loss or unauthorized access to customer data.<\/p>\n <\/p>\n Google Drive Terms of Service<\/a>:<\/strong><\/p>\n Like Amazon\u2019s AWS customer agreement, Google takes contradictory positions related to whether Google will maintain customer data in confidence.\u00a0 On the bright side, Google states on its frequently asked questions web page<\/a>:<\/p>\n \u201cYou control who can access your files in Drive.\u00a0 We will not share your files and data with others except as described in our Privacy Policy.\u201d<\/p><\/blockquote>\n This is not incorporated into the terms of service contract for Google Drive.\u00a0 In contrast to the reassuring language quoted above, the Google Drive terms of service state:<\/p>\n \u201cWhen you upload, submit, store, send or receive content to or through our Services, you give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes we make so that your content works better with our Services), communicate, publish, publicly perform, publicly display and distribute such content. The rights you grant in this license are for the limited purpose of operating, promoting, and improving our Services, and to develop new ones.\u201d<\/p><\/blockquote>\n <\/p>\n