February 11, 2020

COURT FINDS TECHNOLOGY COMPANY'S PRODUCT IS NOT A TRADE SECRET


Do you have a trade secret?  If so, do you know how to protect it?  In a recent case, the plaintiff was a technology company that provides messaging services (“Plaintiff”).  The defendant was one of the Plaintiff’s co-founders (“Defendant”).  Over time, the relationship between the Plaintiff's co-founders deteriorated and the Defendant created a new company.  The Defendant also created a new product (“New Product”) that was allegedly similar to a product created by the Plaintiff (“Plaintiff’s Product”).  When the Plaintiff’s other co-founder discovered that the Defendant was planning to release the New Product, the Plaintiff filed a lawsuit against the Defendant. The Plaintiff alleged that the Defendant misappropriated the Plaintiff’s trade secret, the Plaintiff’s Product.  In considering the Plaintiff’s lawsuit’s claims, the court considered whether the Plaintiff’s Product was a trade secret that was entitled to protection under, among other things, the Defend Trade Secret Act.  The court found, among other things, that the Plaintiff’s Product is a concept and that a concept can be protected but it must have enough substance to be economically valuable and for a court to know what it is protecting.  The court found that without code, an instruction manual, or details on how the Plaintiff’s Product will work, the Plaintiff’s Product lacked the substance necessary to be a trade secret.  The court also found there were no reasonable efforts to protect the secrecy of the Plaintiff’s Product.  Accordingly, the court found that the Plaintiff failed to establish that the Plaintiff’s Product is a trade secret.


For more information, please contact Steven Weber at steve@starkweber.com. 


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