As we discussed in a previous article, companies can be at risk from internal and external sources of industrial espionage, in an attempt to gain an unfair competitive advantage or disrupt operations.
Owners of a trade secret have a federal cause of action against an individual or company that misappropriates their trade secret “if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1). The Defend Trade Secrets Act of 2016 (“DTSA”), which amends the Economic Espionage Act of 1996, defines a “trade secret” to include “all forms and types of financial, business, scientific, technical, economic, or engineering information.” However, the DTSA requires that: (1) the owner takes “reasonable measures to keep such information secret;” and (2) “the information derives independent economic value, actual or potential, from” its secrecy. Id. at § 1839(3).
There is no specific guidance on what constitutes “reasonable measures” that an owner must take to keep their trade secrets safe. As a result, whether measures are “reasonable” significantly depends on the nature of the trade secret at issue. In Dairy, LLC v. Milk Movement Inc., the plaintiff, Dairy, LLC (“Dairy”), sought a preliminary injunction to prevent the defendant, Milk Movement Inc., from using secret methods used in Dairy’s payroll software. The methods in Dairy’s payroll software enabled its clients to maximize benefits...
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