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Rethinking 'Reasonable Efforts' to Protect Trade Secrets in a Digital World

Elizabeth A. Rowe University of Florida - Fredric G. Levin College of Law Abstract: One advantage of using trade secret law to protect valuable business information or inventions is the ease and relative inexpensiveness of that form of intellectual property, versus for instance, seeking patent protection. Indeed, under the modern framework, trade secret law simply requires that the information be of value and that it be kept secret. The requirement of secrecy is thus the sine qua non of trade secret protection but it is also a double edged sword. It is at once the simplest and most difficult thing to accomplish. The doctrinal lens through which a court evaluates the sufficiency of protection measures is through the reasonable efforts requirement. While absolute secrecy is not required, the trade-secret owner is expected to show that it took efforts reasonable under the circumstances to protect the secret. This Article explores a question previously unaddressed in the literature: should the greater risks presented to trade secrets in a digital world change the way that courts evaluate reasonable efforts when a trade secret is misappropriated using some form of computer technology? Should reasonableness be pegged to a should have known standard such that courts impute an objective expectation that higher safety precautions will be utilized because of the risks that in today's digital world trade secrets are easier to access and disseminate? The Article discusses the digital world and the way in which electronic technologies has effected how we store, access, and disseminate trade secrets. It urges courts to give special consideration to the known technological risks that may or may not have been considered by the trade secret owner. It proposes consideration of such factors as: (a) the nature of the industry, (b) the nature of the trade secrets and how they were stored, (c) the nature of the measures taken to protect the secrets, and (d) the known risks from storage and protection choices. The Article concludes that trade secret protection cannot be an after thought. Rather, in order to be reasonable it requires a more conscious, risk assessment approach that better anticipates and ultimately stems the inappropriate dissemination or disclosure of the secrets. Keywords: trade secrets, reasonable efforts, technology, protection, computers, efforts reasonable under the circumstances, digital world, digital, trade secret storage, trade secret dissemination, e-mail, internet, data security, technological risks, mobility Rowe, Elizabeth A.,Rethinking 'Reasonable Efforts' to Protect Trade Secrets in a Digital World(July 16, 2008). Available at SSRN: http://ssrn.com/abstract=1161166

Full post as published by The Trade Secrets Vault on August 13, 2008 (boomark / email).