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Comprehension of Underlying Source Code and Algorithm Unnecessary to Make Out

A software licensor that should have known that the third-party software it included in its product improperly contained plaintiff's trade secrets may be liable for trade secret misappropriation, even if the licensor could not understand or decipher the object code embodying the trade secret. ClearOne Communications, Inc. v. Chiang, No. 2:07-cv-37, 2007 U.S. Dist. LEXIS 91693 (D. Utah Dec. 13, 2007). The court denied the licensor's motion to dismiss the plaintiff's trade secret claims, rejecting the licensor's argument that it could not be liable for trade secret misappropriation because it could not read the object code. The court ruled that there is no requirement of comprehension of a trade secret to state a claim for misappropriation under the Utah version of the Uniform Trade Secrets Act. The court also noted that the Act prohibits not only the disclosure of a trade secret, but also the use of a trade secret, where the defendant had "reason to know" that it was obtained by improper means.

Full post as published by The Trade Secrets Vault on February 14, 2008 (boomark / email).