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What must one do to protect trade secret information?
A trade secret holder must use "reasonable measures under the circumstances" to protect the confidentiality of the information. The better this step is performed the less likely the trade secret holder will have problems in the future and the future problems will be more easily resolved.
Under this requirement, one may tend to compartmentalize or itemize activities, since any discussion must consider each particular activity separately. To compartmentalize places undue stress on the words "reasonable measures" to the exclusion of the words "under the circumstances." Instead of compartmentalizing, one should consider each specific activity as a single part of a larger whole - that whole being the total circumstances surrounding the treatment of the information. (See Example 1 immediately below).
Example 1: Assume all employees of a company signed a non-disclosure agreement. Assume that every day those employees promise to never identify a single customer to anyone outside the company. Further assume one other fact completes the whole of the circumstances surrounding the customer list. Every month the board of directors sends a copy of its customer list to all of the company's competitors. The customer list is not a trade secret even though the protective acts outnumber the facts showing lack of protection 2 to 1. The facts showing the entire circumstances are more likely to be interpreted as lack of protection despite the protective efforts.
Updated: 11/12/99
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