The following discussion is based on trade secret law in the state of Minnesota and, while based on the Uniform Trade Secret Act, should not be assumed to apply across the board to other states.

Information

Almost any type of information is sufficient to meet this element. Examples of typical information, which may be protected as a trade secret, include formulas, patterns, compilations, programs, devices, methods, techniques, and processes. The information may exist in any discernible format including written words and symbols, machines, articles of manufacture, living organisms, etc. Information need not be patentable to qualify as a trade secret. Put another way, non-technical information that would not qualify for patent protection may be protectable as a trade secret.

Not Generally Known or Readily Ascertainable

The degree of secrecy required for information to be considered “not generally known” is not well defined. It is clear that information known to the general public cannot be a trade secret. It is likewise clear that information need not be wholly secret to be protectable as a trade secret. Somewhere between these two extremes lies the demarcation between protectable and un protectable information. Location of that line is difficult at best and is handled on a case-by-case basis.

Independent Economic Value

To be protectable as a trade secret, information must derive independent economic value from the fact that it is not generally known. The purpose of this element is to ensure that trade secret litigation is not generated over trivial bits of information. This element is seldom at issue. Substantially any economic value is sufficient to comply with this element and persons seldom litigate over information having limited economic value.

Efforts to Maintain Secrecy

The possessor of potential trade secret information must take reasonable measures to protect the secrecy of such information. Failure to take such measures can result in a complete loss of trade secret rights in such unprotected information.

The following measures have been determined as helpful toward maintaining a trade secret. The list is not complete, nor must every measure be complied with. However, the more measures implemented, the greater the possibility that the possessor of the trade secret will be found to have taken reasonable steps to protect the secrecy of the potential trade secret, and thereby be afforded trade secret status for such information.

1. 1. Identify all trade secrets.
2. Routinely review information to reassess its confidential nature.
3. Designate a single individual to control distribution of and access to all confidential information.
4. Mark all proprietary and confidential information as such, including screen of computer text.
5. Maintain confidential information in locked areas only.
6. Shred or incinerate unwanted confidential documents.
7. Fence areas containing trade secrets.
8. Monitor entrances and exits in areas containing trade secrets.
9. Restrict entry to areas containing trade secrets.
10. Visually conceal trade secret equipment.
11. Exclude group tours from areas containing trade secrets.
12. Routinely check credentials of all maintenance-related visitors.
13. Employ visitor log book or card system.
14. Employ visitor identification badges.
15. Employ hard hats, lab coats, etc., of particular color for visitors.
16. Encourage surveillance for all employees.
17. Restrict internal distribution of confidential information.
18. Classify employees with respect to their access to confidential information.
19. Mask out true parameters on testing and laboratory monitoring instruments.
20. Employ code symbols in operation manuals, reports, and memorandums rather than true values and descriptive names.
21. Use code symbols upon raw material containers rather than descriptive or identifying names.
22. Screen all documents released to third parties with respect to trade secret information.
23. Recover all documents related to trade secret information which have been intentionally released to third parties.
24. Remove all trade secret information from drawings and operating manuals supplied to third parties.
25. Enter into a written employment agreement with all employees regarding trade secret information.
26. Interview all existing employees:
• Recover all materials in employees’ possession; and
• Remind employees of their continuing obligation to maintain trade secrets.
27. Obtain an agreement from vendors or contractors to maintain secrecy
28. Include secrecy clauses in purchase orders and the like.
29. Complicate products to prevent reverse engineering.

Trade secret protection ends when (i) the information becomes generally known or readily ascertainable, (ii) the information no longer derives independent economic value from the fact that it is not generally known, or (iii) insufficient effort has been exerted to maintain secrecy of the information. Minn.Stat§325C.01 Sub div. 5 (2001).

One common means by which trade secrets are typically lost is when a third party independently reverse engineers a product embodying the trade secret and thereby discovers the trade secret. This is a permissible manner of discovering a trade secret and does not constitute misappropriation of the information.

In Minnesota, trade secret misappropriation occurs when a trade secret is taken through theft, bribery, misrepresentation, or breach of a duty to maintain secrecy of a trade secret. Further, misappropriation can be attributed to both an active party who actually takes trade secret information, and a passive party who learns of such trade secret information through the active party and knew or should have known of the trade secret status of the information. Minn.Stat. §325C.01 Subdivs. 2 and 3 (2001).

Most commonly, claims of misappropriation occur when one or more employees leave to work for a competitor, after which the competitor appears to be using the previous employer’s trade secrets. Industrial espionage is another way trade secrets are misappropriated.