PROTECT TRADE SECRETS SOFTWARE

A company’s workforce working remotely creates novel challenges for the protection of trade secrets, particularly because, in many cases, the transition to working from home was abrupt, mandated by the government with limited advance notice, and may not have given employers sufficient time to implement best practices safeguards to protect their data.įor example, more employees are using their personal computers or cell phones on home VPN or wireless networks, which may be more susceptible to hacking.

The onset of the COVID-19 pandemic in the United States and the lockdown, mandated business closures, and quarantine measures put in place around the country forced much of the nation’s workforce into remote work, with some estimating that as much as 40 to 60 percent of the workforce was working from home in the April to June period of 2020, as noted by a Stanford University economist and a Gallup poll. Potential Impacts of the COVID-19 Era on the “Reasonableness” Determination

PROTECT TRADE SECRETS SOFTWARE

By way of example, digital security measures that may have been state of the art 20 years ago and that any fact finder would have then found to constitute “reasonable efforts” to protect a trade secret would likely be considered obsolete and ineffective today.Īlthough this standard is inherently variable and must in practice be examined on a case-by-case basis, decades of case law tell us what measures tend to be considered “reasonable.” Companies seeking to maintain trade secret protection for their information or products should generally take the following steps, which are often considered reasonable if not necessary to preserve secrecy: (1) require those with access to the trade secret to sign a nondisclosure or confidentiality agreement (2) restrict access to especially sensitive materials on a need-to-know basis (3) maintain state-of-the-art physical and digital security measures to protect the location or locations where the trade secrets are stored and (4) where possible, for example in the case of software or documents, clearly label the materials as trade secret or confidential (or both). What is considered reasonable in any given case may change based on geographic location, era, industry, or simply the makeup of the venire. 2009)).īecause reasonableness is inherently subjective, proving or disproving whether reasonable steps were taken to maintain the secrecy of a trade secret is a complex issue in trade secret litigation that frequently prevents parties from prevailing on summary judgment. specially developed processes and custom machinery ( Premier Lab Supply, Inc.unique formulas or products ( Del Monte Fresh Produce Co.proprietary software ( telSPACE, LLC v.customer or pricing lists ( Cytodyne Techs., Inc.In practice, classic examples of trade secrets are things like Variations on these definitions have been codified by numerous state statutes modeled on the Uniform Trade Secrets Act and were adopted at the federal level with the introduction in 2016 of the Defend Trade Secrets Act, 18 U.S.C. Generally speaking, a trade secret is something that (1) derives independent value from not being generally known or readily ascertainable by other people and (2) is the subject of reasonable efforts to maintain its secrecy. In determining whether something-a formula, software, a customer list-qualifies as a trade secret under the law, judges and juries ask this fundamental question: Was it the subject of “reasonable efforts” to maintain its secrecy? This article looks at whether and how the reasonableness standard might change in the COVID-19 era, when millions of employees are working remotely, physical and digital security measures are harder to implement and enforce, and significantly more opportunities exist for carelessness and disclosure of proprietary information.

Protect trade secrets