If You Have a Trade Secret, You Better Protect It

            Late last month, Judge Cornelius J. Moriarty of the Massachusetts Superior Court granted summary judgment for a defendant company and two individual defendants on a trade secret misappropriation claim because the plaintiff company did nothing to protect what it claimed were trade secrets.  One element of a trade secret claim is that the plaintiff must demonstrate that it took sufficient actions to protect its trade secret from unauthorized disclosure.  Among the factors the court considers is (1) whether the plaintiff had agreements with employees and others restricting disclosure, and (2) any security precautions to prevent unauthorized access to the trade secret.  In this case, the plaintiff could produce no evidence that it had any policy to protect confidential information, and it never had any of the defendants sign a confidentiality agreement.  In fact, certain information that the plaintiff claimed as trade secrets was freely available on the plaintiff’s computers, and the plaintiff even publicly disclosed some of what it claimed were trade secrets on its websites.   

            So what’s the lesson?  If you have trade secrets or confidential information as part of your business, make sure you protect it.  Make your employees, independent contractors, and vendors sign non-disclosure agreements if you will be disclosing confidential information to them, and restrict access to confidential information to those with a need to know it by using technological barriers to access, among other things.  If you don’t, your secrets might be exposed, and the legal system might not be able to help you.

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