Trade secret law: A brief guide for in-house counsel; Inside Counsel, 8/18/16

Ben Berkowitz, Briggs Matheson, Inside Counsel; Trade secret law: A brief guide for in-house counsel:

"What information does trade secret law protect?

Forty-seven states have adopted some form of the Uniform Trade Secrets Act (“UTSA”), with New York, Massachusetts, and North Carolina as the only exceptions. Under the UTSA, there is a two-prong test for determining whether information may be subject to trade secret protection. First, trade secret information must be information that “derive[s] independent economic value” from not being publicly known (See, e.g., Cal. Civ. Code § 3426.1(d)). That is, the information is valuable because it is a secret that others, including competitors, do not possess. Second, the information must be “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Id.) “The determination of whether ‘reasonable efforts’ have been taken is quintessentially fact-specific,” and “‘depends on a balancing of costs and benefits that will vary from case to case.’” (Rockwell Graphic Systems, Inc. v. DEV Industries, Inc.) “Reasonable efforts” may include adopting confidentiality policies, entering into non-disclosure agreements, and establishing digital and physical security infrastructure. (Religious Tech. Ctr. Netcom On-Line Commc’n Servs.)"