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Posts Tagged ‘trade secret’

Proving the Existence of Trade Secrets

August 3rd, 2010

By Mark Schecter | No Comments »

In our last article we looked at what is a trade secret, and case law that addressed the question.

In Thomas v. Alloy Fasteners, Inc., 664 So. 2d 59 (Fla. 5th DCA 1995) the Florida court ruled that “there is nothing magical or secret” about the customer lists and cold-calling method used by Alloy’s former employee. And because the potential customers’ names and contact information could be obtained from public sources, there was no secret as to the class of likely customers.

In Templeton v. Creative Loafing Tampa, Inc., 552 So. 2d 288 (Fla. 2d D.C.A. 1989), the court reached a similar decision. During his time with Creative Loafing, Templeton developed relationships with advertising clients and various other contacts. He knew many on a first name basis and continued to reach out to the contacts after he was no longer employed with the company.

The court also stated “an employer may not preclude its former employee from utilizing contacts and expertise gained during his former employment.” Templeton knew the contacts on a first name basis and because there was no “secret” process to obtaining their identities, the list of contacts was not a trade secret protected under the Florida statute.

How can you prove the existence of a trade secret?

To prove a trade secret actually exists, the law says that a business must show:

  • That the process is secret and not accessible to the general public or your competition;
  • The extent of measures taken by you to guard the secrecy of the information;
  • The value of the information to you and your competitors;
  • The extent to which the information is known outside of your business;
  • The extent to which it is known by employees and others involved in your business;
  • The amount of effort or money expended by you in developing the information; and
  • The ease or difficulty with which the information could be properly acquired or duplicated by others. Thomas v. Alloy Fasteners, Inc.

If you are unable to prove a business process is a trade secret, you may not be able to take legal action to protect your trade secrets from former employees.

Contact our business lawyers to discuss steps you can take to protect your company’s trade secrets. You can use this form to email or call us at (954) 779-7009.

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Posted in business, trade secret | No Comments »

What is a Trade Secret (and What is Not)?

July 30th, 2010

By Mark Schecter | 1 Comment »

divulge-trade-secretIn recent days, we have discussed common business disputes, the divulgence of trade secrets and how both can affect your business.

Let’s continue our discussion on trade secrets and former employees.

As mentioned previously, the court can take legal action through an injunction to stop former employees from divulging trade secrets. But what is a trade secret and what is not?

The Florida Statute that governs trade secrets is the Florida Statute §688 – also known as the Uniform Trade Secrets Act.

This law prohibits the misappropriation of trade secrets – the acquisition, disclosure and use of the information to the disadvantage of the owner of the trade secret.

Without a non-compete agreement in place, to prevent a former employee from working with a competitor you must prove the former employee had knowledge of your trade secrets and that he/she either divulged, attempted or threatened to divulge those secrets to your competitor.

This rule was established by a Florida case in the early 1990′s – Mach Corp vs Seagate Tech. This case sought to protect the employee’s right to seek employment in their field and work in direct competition with their former employer, in the absence of proof that trade secrets were exposed.

The court decided that knowledge of trade secrets, working with the competition and mere suspicion is not enough to justify the issuance of an injunction against a former employee.

Are all Business Processes Considered Trade Secrets?

No. In Thomas v. Alloy Fasteners, Inc, the employee (Thomas) developed customer lists and engaged in cold-calling during his employment with Alloy Fasteners, Inc. When he left Alloy, Thomas took the customer lists with him and continued to reach out to the prospective customers.  Thomas never signed a non-compete agreement with Alloy.

The court ruled that “there is nothing magical or secret” about the customer lists and cold-calling method used by Thomas. Furthermore, because the potential customers’ names and contact information could be obtained from public sources, there was no secret as to the class of likely customers.

“Customer lists may not qualify as trade secrets unless the employer presents evidence that they are the product of great expense or effort, that they are distillations of larger lists, or that they include information not available from public sources. If the information on the lists is easy to obtain merely by looking at the advertisements, maga­­zine, periodicals, in addition to many other sources, local newspapers and the yellow pages, they will not qualify as trade secrets.”

In the absence of a non-compete agreement, Thomas was free to reach out to the customer lists.

Are you involved in a dispute over trade secrets? Give us a call at 954-779-7009 to discuss your case.

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Posted in business, contract law, Corporation Law, trade secret | 1 Comment »