Massachusetts Courts Emphasize Need to Actively Protect Trade Secrets

A recent court decision in Massachusetts reinforces the responsibility of companies to protect their trade secrets. I’ve previously written about trade secrets and how in order for something to qualify as a trade secret, it must be secret — accordingly, the company must take some steps to actually keep the information secret. C.R.T.R. v. Lao involved a company claiming misappropriation of trade secrets by a former employee. The former employee moved for summary judgment on the company’ claim, arguing that, among other things, a trade secret holder must take affirmative steps to protect those secrets in order to have a trade secret and make a claim for misappropriation. The former employee alleged that his former employer failed to take such affirmative steps. The court agreed with the former employee, finding that the company didn’t have the employee sign a confidentiality agreement, have a policy regarding protection of confidential information, secure the information on their own computer systems, and even partially advertised the information it claimed as trade secrets. Lao emphasizes the need for companies who wish to utilize trade secret protection to actually secure their secrets. At a minimum, individuals and entities who will be privy to trade secrets must be made to sign confidentiality agreements, the information must be place behind physical and/or electronic security measures, and access to the information must be monitored and controlled. And above all, the information must be kept secret. Without these measures, a company cannot likely claim the benefit of trade secret protection.

Leave a Reply

Your email address will not be published. Required fields are marked *