Information must be Secret Metallurgical -- matters of general - - PowerPoint PPT Presentation

Trade Secret – (1) Validity

• Information must be Secret
• Metallurgical -- “matters of general knowledge

in an industry cannot be appropriated by one as his secret” (p. 41)

• Restatement of Torts – pp. 45, note 5

Trade Secret – (1) Validity

• Information must be Secret
• UTSA § 1 (4)(i)(“from not being generally

known to, and not being readily ascertainable by proper means, other persons . . . .”

• CA UTSA § 3426.1(d)(1) “from not being

generally known to the public or to other persons . . . .”

Trade Secret – (1) Validity

• Information must be of Value
• UTSA § 1 (4) “information, including a

formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential” from being secret

Trade Secret – (1) Validity

• Must take Reasonable Efforts to

Maintain Secrecy of information

• UTSA § 1 (4) (ii) “is the subject of efforts that

are reasonable under the circumstances to maintain its secrecy.”

• Reasonable under circumstances – cost v.

benefit

Trade Secret – (2) Misappropriation

Trade Secret – (2) Misappropriation

• Misappropriate a trade secret if

acquired by Improper Means

• What is “improper”?
• Is mere possession “misappropriation”

when obtained by improper means?

• 3rd party/indirect liability

Trade Secret – (2) Misappropriation

• Misappropriate a trade secret if acquired

by Breach of Confidence

• Expressed v. Implied
• Is mere possession “misappropriation” in

breach of confidence situation?

Trade Secret – (4?) Reverse Eng’g

• Defense (?) to misappropriation is

Reverse Engineering

• Is focus on “improper means”?
• Or whether information is “secret”?
• Or “reasonable efforts”?

Trade Secret – Employees

• Common Law Obligation to Assign

Inventions

• Trailer Clauses
• Must be reasonable
• Contracts to Restrict Use of Trade Secrets
• Express v. Implied
• Particular v. General Knowledge
• Restrictions on non-trade secrets?

Trade Secret – Employees

Trade Secret – Employees

• Noncompetition Agreements
• Edwards v. Arthur Andersen (CA S.Ct.)
• “If you leave the Firm, for eighteen months after release or

resignation, you agree not to perform professional services of the type you provided for any client on which you worked during the eighteen months prior to release or resignation. This does not prohibit you from accepting employment with a

• client. [¶] For twelve months after you leave the Firm, you

agree not to solicit (to perform professional services of the type you provided) any client of the office(s) to which you were assigned during the eighteen months preceding release

• r resignation. [¶] You agree not to solicit away from the Firm

any of its professional personnel for eighteen months after release or resignation.”

Trade Secret – Employees

• Noncompetition agreements generally not

favored

• Compare California:
• Section 16600. “Except as provided in this

chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

• To Virginia:
• must be “reasonable as to its duration,

geographical area, and type of employment or line

• f business”

Trade Secret – Employees

Trade Secret – Employees

• Inevitable Disclosure Doctrine
• Nonsolicitation Agreements

Trade Secret – (3) Remedies

• Injunction

Damages Injunction

Date of PI/Judgment

Trade Secret – (3) Remedies

• What if no longer a Trade Secret? Winston

Research

• Head-Start Injunction

Secret Disclosed Misappropriation Injunction—Delay Infringer

• Other options?
• No injunction – Conmar (2d Cir.)
• Permanent injunction – Shellmar (7th Cir.)

Head start

Trade Secret – (3) Remedies

Secret Disclosed Misappropriation Injunction—Delay Infringer Head start

Trade Secret – (3) Remedies

• Damages