Deal Client/Friend:
Publishing Trade Secrets: "Show.It and Blow.It"

The Question
Your client is a software provider whose website allows a user to sample representative elements of its products. Its glossy brochure contains sample screens. All of its products are state of the art and the company considers its programs to be top secret. An employee leaves, joins a competitor, and in a miraculously brief time, the competitor is marketing software with strikingly similar screens and other elements to those in your client's program. The client sues alleging misappropriation of trade secrets. Will the claim be undermined by the client's own promotional efforts?

Purpose of Trade Secret Law
The law of trade secrets is derived from the interest in advancing fair competition and commercial ethics while discouraging unjust enrichment attributable to bad faith efforts resulting from a breach of confidence. However, with the rise in accessibility to information from sources like the Internet, advertising and the media, companies must be conscious of a balance between the need to protect proprietary information and a desire for self promotion.

Overview
This article will discuss recent cases in which courts have declined to protect business information where intentional, inadvertent and even wrongful dissemination through Internet access, advertising brochures and public court files places such information in the public domain and forever beyond the protection of the law.

The Basics of Protection
Virtually any type of information can qualify as a trade secret.

The case law generally requires that a trade secret be information which is held for the purpose of conferring a competitive advantage, which is unknown outside the company, and the secrecy of which the company has taken reasonable steps to guard.

Effect of Dissemination
Trade secret status turns, among other things, on the plaintiff's ability to demonstrate that it took reasonable steps to keep the information confidential. Reasonable steps can include: advising employees of the existence of the trade secret, limiting access to the information to only those few who need to know, taking measures to safeguard physical access to the trade secret, e.g. locking offices or file cabinets, requiring passwords to access computer systems, requiring employees to sign confidentiality agreements, requiring employees to sign out the materials, stamping the materials as confidential and conditioning third-party-access to materials on signing confidentiality agreements or acknowledging confidentiality.

But, information which is in the public domain, either because it is the result of publicly available knowledge or because the information has been purposefully put into the public domain through dissemination, will not be entitled to protection, even if the dissemination is inadvertent, unintentional or the result of wrongdoing.

Thus, companies can unwittingly forfeit trade secret status by failing to take simple precautions. For example, documents filed with a court become part of the public domain, as may documents submitted to the government for purposes of registration if confidentiality is not specifically protected by statute or court order. Confidential information becomes public when released in promotional brochures or released to customers through other means including distribution of manuals or other technical diagrams and even via "web pages" on the Internet." Prospectuses used by companies to raise money can also cause confidential information to lose trade secret status. Indeed, even the improper destruction of documents can be problematic.

Suggestions
Reasonable steps must be taken to protect trade secret status. Clients should be advised to:

• Use restrictive covenants in employment agreements;
• Require confidentiality stipulations for potential customers or business partners or parties logging onto a website;
• Insure such information is kept in a secure place;
• Employ methods which restrict access to the information;
• Require stamping information "confidential";
• Move to seal proprietary information filed with courts;
• Review promotional materials to assure that brochures, web pages and the like do not contain materials to be protected;
• Limit access to electronic information on computer systems by passwords and preventing unauthorized access to computers;

Conclusion
The growth and accessibility of the Internet and other methods of advertising and promotion, while creating exciting and low-cost advertising opportunities, also presents potentially problematic issues for protection of trade secrets. Although framework of case law and statutes exist to protect trade secret status, these tools are ineffective when valuable trade secrets are revealed - even inadvertently - through public dissemination. Therefore, advice concerning protection of trade secrets may be timely before a client undertakes an advertising campaign and not just upon the defection of an employee with access to critical proprietary information.

The foregoing comments are of a general nature, and are not intended nor should they be used as a substitute for legal advice or opinions which can be rendered only when related to specific fact situations.

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