11/11/2023 0 Comments Trade secrets are protected![]() ![]() The tests for "reasonable efforts" (UTSA) and "reasonable measures" (DTSA) are intertwined with the statutory definition of "improper means" which includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. Trial courts are no longer tolerating the recitation of a "grab bag' of security measures untethered to specific trade secrets. Specific security measures must be tethered to specific trade secrets. Starting with "protection" before identification and classification of trade secret assets is doomed to fail. "Protection" of a trade secret is the third phase. Identification precedes classification, identification and classification precede protection identification, classification and protection precede valuation. The four stages cannot be juggled around. ![]() ![]() There are four stages of trade secret asset management: identification, classification, protection, and valuation. Technical measures include various access controls and security measures to restrict trade secrets on a "need to know" basis and to "break up the pieces of the puzzle" so the theft of a trade secret cannot be replicated.Ĭontractual measures include non-disclosure and confidentiality agreements, training, monitoring, entry and exit interviews and other measures deployed to protect against the unauthorized acquisition, disclosure or use of trade secret assets by current and former employees. Organizational measures include physical security measures and policies, practices, and procedures to notify and protect trade secret assets. There is a triad of measures to protect trade secret assets: organizational measures, technical measures, and contractual measures. Start-ups and smaller companies cannot, and they must perform a rigorous cost/benefit analysis to protect trade secrets within the financial constraints of the enterprise. Wealthy companies can deploy all the "bells and whistles" to protect trade secret assets. Reasonable measures for a smaller company may just involve simple physical security measures such as locking entrances and storing sensitive documents in a locked file cabinet in the engineer's office.įinancial strength is also a situational factor. A smaller company will not require the full panoply of physical and cybersecurity measures required by larger corporations. The size of the company is another situational factor. Poaching employees (with exposure to trade secrets) to change jobs and join head-to-head competitors is also a much higher risk in highly competitive industries. Sophisticated efforts to deter economic espionage may be required to protect against the unauthorized acquisition of trade secret assets. In a highly competitive industry, there is often a greater risk of trade secret misappropriation. The nature of the industry is also a situational factor. ![]()
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