![]() ![]() For example, when an employee downloads information from the cloud to a personal device outside of the company’s control, the company may lose track of its data and the ability to maintain the secrecy or confidentiality it thought it had. The ease with which data can be transferred in a cloud-centric world significantly changes a company’s ability to maintain the secrecy of its information. In today’s world where companies use cloud applications allowing employees to work more flexibly, the inquiry becomes more difficult. Other indicia of reasonable measures include storing the information in a password-protected, limited-access server, and having employees sign written acknowledgments of their obligation to keep sensitive business information confidential. In some cases, the party seeking trade secret protection did not adequately mark the information as confidential. Numerous courts have dismissed trade secret claims based on the failure of the plaintiff to enact “reasonable measures” to protect its trade secrets. What constitutes “reasonable measures” is not defined, and the actions that a company takes to protect its trade secret information up front can impact the likelihood of a successful trade secret claim years later.Ĭoca-Cola is widely known for its efforts to maintain secrecy of its formula for its popular soft drink, but this is not the benchmark for what is required. The DTSA and various state statutes require that a trade secret owner take “reasonable measures” to protect its trade secret information. ![]() Proactive Measures to Protect Confidential InformationĬompanies need to make smart decisions to protect confidential information from day one. If nothing else, the past year has proven damages that can and are being awarded for trade secret claims remain staggering. On the recovery side, successful plaintiffs in trade secret cases have continued to see courts award substantial damage awards. The past two years have seen nearly 2,000 new cases alleging trade secret misappropriation filed in federal court. While historically trade secret claims were brought in state courts, since the 2016 passage of the federal Defend Trade Secrets Act (DTSA), which created a federal cause of action for trade secret theft, claims are now routinely brought in the federal courts. Last year brought robust litigation in the trade secret space across a wide swath of industries ranging from cannabis to fashion and retail, e-commerce and consumer products. Think Coca-Cola formula.ĭespite the pandemic, claims alleging a misappropriation of trade secrets have increased in recent years with the past year being no exception. Rather, each is a protected trade secret.Ī trade secret enjoys significant advantages over other forms of IP protections in that disclosure is not required and the “secret” can be protected forever. Each of these examples does not enjoy patent, copyright, or trademark protection. Well-known examples include the formula for Coca-Cola, Google’s search algorithm, and McDonalds’ secret sauce recipe. Trade secrets are often core to a business’ financial viability, if not its success, and rank among a company’s most valuable assets. As workforces with access to confidential and proprietary information remain increasingly remote, the necessity for businesses to protect their confidential information is magnified. ![]() In the face of a global pandemic and employees working remotely in varying degrees, the protection of trade secrets has taken on an increased importance.Īdditionally, with communication taking place largely in a virtual world across a variety of new technological media, new challenges have emerged for companies endeavoring to protect their confidential competitive information. Companies need to continually protect the information that drives their business success. ![]()
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