How “Secret” is Secret for a Trade Secret?

Top SecretReasonable Efforts to Maintain Secrecy is a Question of Fact
Whether reasonable secrecy efforts were made is a question of fact. (San Jose Const., Inc., 155 Cal.App.4th at 1543 (“[W]hether SJC made adequate attempts to keep its prospective project information secret is for the jury to measure.”); In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 306 (“[W]hether a party claiming a trade secret undertook reasonable efforts to maintain secrecy is a question of fact….”); Mattel, Inc. v. MGA Entertainment, Inc., 782 F.Supp.2d 911, 960 (C.D. Cal. Jan. 5, 2001) (“The determination of whether information is the subject of efforts that are reasonable under the circumstances to maintain its secrecy is fact specific.”). Here, for example, is the office or location in question; is office is “off limits;” do the computers have a password; is access restricted to certain people; are there non-disclosure or confidentiality agreements, even oral ones, in place? Importantly, secrecy efforts need only be reasonable under the particular circumstances involving a specific party, industry and situation. (DVD Copy Control Assn., Inc. v. Bunner (2003) 31 Cal.4th 864, 881(“The secrecy requirement is generally treated as a relative concept and requires a fact intensive analysis.”); see generally CACI No. 4404.) Here, the trade secret plaintiff may not be in the aerospace industry or computer software engineering firm. In this case, we may be talking about small, mom and pop operations. In such a circumstance, whether the security which was implemented by the trade secret Plaintiff was reasonable is a question of fact for the jury.

Eric Papp, Esq.

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.

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.