Can Information That is “Generally Known” Be a Trade Secret?

uniqueWhether Information is Generally Known is a Question of Fact

Whether the subject information is generally known to the public or competitors is a question of fact. (Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1430 (“The issue of whether information constitutes a trade secret is a question of fact.”).) Again, as the Altavion court held, “…even if some or all of the elements of Altavion’s design were in the public domain and thus unprotectable, the combination was a protectable trade secret if it was secret and had independent economic value.” (Emphasis original) (Altavion, Inc. v. Konica Minolta Systems Laboratory Inc. (2014) 226 Cal.App.4th 26, 47.)

So, the first inquiry is whether or not the information is “generally known” to the public or competitors.  However, even if some aspect is “generally known,” a novel or unique combination of the information may remove it from the “generally known” into a trade secret.

Eric Papp, Esq.

Trade Secrets Do Not Need to Be in Writing

Legal Pad, pen and law book5. Trade Secrets do Not Need to be in Writing

Trade secrets need not be in writing. (Morlife, Inc, 56 Cal.App.4th at 1522 (“to afford protection to the employer, the information need not be in writing but may be in the employee’s memory”); Brocade Communications Systems, Inc. v. A10 Networks, Inc., 873 F.Supp.2d 1192, 1215 (N.D. Cal. June 12, 2012) (“It is this combination of elements that makes the information valuable and not generally known to the public. Moreover, the mere fact that the information is not in a written list is not dispositive of sufficient particularity.”) Here, many trade secret Defendants attempt to make much of the fact that some of the information in contention was in the Defendant’s “head.” However, as cited above, this is not dispositive and, at best, raises an issue of material fact as to what exactly was in the Defendant’s head and what combination of facts, whether in his head or not, fall under the Trade Secret claim.

What if the information is “generally known,” can that still be a trade secret? The next post will cover this question.

Eric Papp, Esq.

Public Information as a Trade Secret

Private Property - public info4. Public Information as a Trade Secret
Importantly, a trade secret may consist of public information and/or elements, combined with information and/or elements that are not generally known, as long as the combination is unknown, kept secret, and has independent economic value. (Altavion, Inc., 226 Cal. App. 4th at 48 (“even if some or all of the elements of [the plaintiff’s] design were in the public domain and thus unprotectable, the combination was a protectable trade secret if it was secret and had independent economic value”) (original italics); 02 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 420 F.Supp.2d 1070, 1089-1090 (N.D. Cal. March 9, 2006) (court affirmed jury instruction which stated, “Combinations of public information from a variety of different sources when combined in a novel way can be a trade secret. It does not matter if a portion of the trade secret is generally known, or even that every individual portion of the trade secret is generally known, as long as the combination of all such information is not generally known.”); SkinMedica, Inc. v. Histogen Inc., 869 F.Supp.2d 1176, 1194 (S.D. Cal. April 23, 2012) (“A trade secret may be comprised of partly or entirely non-secret elements and still merit protection.”) Often, the Defendants in a trade secret case, as those in the San Jose Const. case, complain that the information sought to be protected by Plaintiff was, in some manner, public. But, again, that is not fatal to a trade secret case. Rather, it is about having all the pieces of the puzzle to the exclusion of all others.

Must Trade Secrets be in writing? The next post will cover this topic

Eric Papp, Esq.

“Information” as a Trade Secret

Hand in the cookie jarImportantly, “Whether information is a trade secret is ordinarily a question of fact.” ( San Jose Const., Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1537 citing: In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 300; Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1430; and Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1521, 66 Cal.Rptr.2d 731.) As the San Jose Const. Inc. case held, “Whether that information actually constituted a trade secret is a factual issue for the jury or court to determine at trial, Continue reading

Trade Secrets

 Watch out for snakes

“There’s no art to find the mind’s construction in the face: He was a gentleman on whom I built an absolute trust.” Macbeth ( 1.4.12-14)

“Trade secret law also helps maintain ‘standards of commercial ethics….’[Citation.] … By sanctioning the acquisition, use, and disclosure of another’s valuable, proprietary information by improper means, trade secret law minimizes ‘the inevitable cost to the basic decency of society when one … steals from another.’ [Citation.] In doing so, it recognizes that ‘good faith and honest, fair dealing, is the very life and spirit of the commercial world.’” (Altavion, Inc. v. Konica Minolta Systems Laboratory Inc. (2014) 226 Cal.App.4th 26, 42 citing DVD Copy Control Assn., Inc. v. Bunner (2003) 31 Cal.4th 864, 881.) This is exactly what is at stake in most trade secret cases – honesty, ethics and fair dealing Continue reading

When is the Jury “Impaneled and Sworn” for Purposes of the Five Year Rule of CCP § 583.310, et seq.

Jury impaneled and sworn

The case of RUTH McCLAMMA STUEVE et al., v. BUCHALTER NEMER et al., answered this very question. The Stueve case stated: Generally, an action must be “brought to trial” within five years of the filing of a civil complaint. (Code Civ. Proc., § 583.310, et seq.) 1 If the time period is not tolled by statute, the case must be dismissed. (§§ 583.340, 583.360.) Continue reading

Perpetrators Can No Longer Use a Loop Hole In CCP § 1002 to Hide Their Sex Abuses Under the Cloak of Confidentiality

dirty little secrets ccp 1002An Amendment to California Code of Civil Procedure Section 1002 Prevents Hiding Certain Sex Abuses Behind Confidentiality Clauses

As of January 1, 2017, a bill amending California Code of Civil Procedure §1002 would prohibit a confidentiality or secrecy provision in a settlement agreement in a civil action for an act of childhood sexual abuse or an act of sexual assault against an elder or dependent adult and would prohibit a court from entering an order restricting access to or disclosure of any information obtained through discovery.

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5 Things You Should Know About Your Contractor

Who is your contractor

My Contractor seemed like a nice guy.

Do you really know who your Contractor is?

Is your house a “Money Pit” like the Tom Hanks classic?  Well, before you sign on the dotted line, always make sure you check off these 5, simple, easy items.  If you do, you might just rest a little easier. Continue reading

Experts Need To Produce Files 3 Business Days BEFORE their deposition

As of January 1, 20expert file, ccp 2034.41517, a deponent who is served with a deposition notice or subpoena calling for electronically stored information to provide a means of gaining direct access to, or a translation into a reasonably usable form of, any information that is password protected or otherwise inaccessible. The bill would also require an expert who is served with a deposition notice, as specified, to produce any materials or category of materials, including any electronically stored information, no later than 3 business days before his or her deposition. (AB-2427) Continue reading

California Employees Cannot be forced into Foreign Courts by Employer

Far far away

California employees cannot be forced to litigate their employment claims far, far away.

Far Far Away

California has always been protective of its citizens.  However, with the ever increasing mobility of employees, some employers will insert a “choice of law” provision into employment contracts, either for convenience of the employer or for favorable (pro-employer) “forum shopping.”  Either way, as of January 1, 2017, California employees cannot be dragged into a foreign court quite so easily to litigate employment claims. Continue reading