Wednesday, May 30, 2012

Trade secrets and inventiveness.

As discussed earlier, there are a number of factors that courts examine to determine whether information is a trade secret. Dutifully adhering to these factors is one of the best things a business can do to help in any future litigation involving a trade secret. It is also helpful to have your employees sign a non-disclosure agreement. No factor or non-disclosure agreement is dispositive, however, because the information may be sufficiently general to prevent it from becoming a trade secret.

Courts generally view information learned by employees in two separate classes. "First, an employee may obtain information of a general nature simply by being on the job. An employer would have no reasonable expectation that such information would be treated as a trade secret. An employee is free to use or disclose this type of general information." Second, there is information "which the employer intends to keep secret by, for example, physically hiding it from view or[] . . . requiring confidentiality." [1] The former is not entitled to trade secret protection, but the latter may be.

One can see that a purported trade secret must not be generally known. It must also be economically valuable. But we already knew that. If a trade secret consists of patentable subject matter, it does not need to have the same standard of inventiveness as a patent. [1] Ipso facto, trade secrets need only be in a Goldilocks' Zone -- to steal a term from astrobiology -- between which they must not consist of general information but do not need to be so inventive that a hypothetical patent could be obtained.

Cemen Tech, Inc. v. Three D Industries, LLC, 753 N.W. 2d 1, 7-8 (Iowa 2008).

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