Deck 22: Trade Secrets Law

Question 1

Indicate which of the following would qualify as a trade secret:

Answer 1

The following answers assume that the owner of the purported trade secrets has made reasonable efforts to maintain secrecy of the information:
A company's plans to expand into Europe Trade secret
Information that a certain training program offered by a company does not work Trade secret
A published patent No trade secret-it's publicly available
A customer list maintained by a company's CEO Trade secret
A copyright registration No trade secret-it's a public record
A company's list of customers posted on its website No trade secret-it's available for others to view (unless this is a restricted intranet) and thus not subject to reasonable efforts to maintain its secrecy

Question 2

Employers cannot monitor the email and other communications of their employees.

Answer 2

False

Question 3

Generally, if there is doubt or ambiguity in a noncompete agreement, courts will construe it against an employer and in favor of the employee.

Answer 3

True

Question 4

Although copyright law does not protect ideas, trade secret law does.

Question 5

ABC Inc. mistakenly posted critical company information on the Internet. The material resided on the Internet for two days before it was taken down by ABC. Trade secret protection has been lost for the information.

Question 6

Independent creation of information is not a defense in trade secret litigation cases.

Question 7

Like trademarks, copyrights, and patents, trade secrets are governed by federal law.

Question 8

To be protected, a trade secret must be registered with the FTC.

Question 9

A company's employees are always under an implied duty not to disclose a company's valuable information whether or not they have signed a   written agreement agreeing not to disclose the information.

Question 10

If properly protected trade secrets can last forever.

Question 11

Give an advantage and a disadvantage of maintaining a formula as a trade secret and an advantage and disadvantage of filing a patent application for the formula.

Question 12

In some states, noncompetition agreements are so disfavored that they are rarely enforceable.

Question 13

Some acts of taking of trade secrets are subject to criminal penalties.

Question 14

To be protected as a trade secret, there must be absolute secrecy of the information sought to be protected.

Question 15

Emily has filed a patent application for a formula that she has been maintaining as a trade secret. Upon publication of the patent application,   trade secret status for the formula will expire.

Question 16

Unless an employee has agreed not to do so, an employee who leaves a company is free to encourage and solicit former colleagues to leave the  company and come work with the employee at a new place of business.

Question 17

Misappropriation of a trade secret can occur when a trade secret is initially acquired lawfully but then later improperly used.

Question 18

A trade secret must be subject to extraordinary measures to maintain its secrecy.

Question 19

Google has a "top secret" plan to revamp its search engine results and rankings. It has disclosed the information to five people in the Marketing Division of the company and to ten people in the New Products and Engineering Division of the company. Discuss whether this disclosure destroys the trade secret status of the information.

Question 20

How would a company go about maintaining trade secret status for its proposed trademark for a new car, and when would trade secret status terminate?

Question 21

Some courts may issue injunctions to prevent ___ ___ of a trade secret, reasoning that even if a former employer cannot show a particular secret has been taken, it is nearly always likely that key employees will eventually disclose what they know to a new employer.

Question 22

Company Z is hiring several employees who previously worked for Company A. These employees were all high ranking Company A employees. To protect itself from litigation by Company A, what should Company Z do?

Question 23

Apple has sued Microsoft for theft of trade secrets. To prove its case and to prove that the information is valuable commercial trade secret information, Apple must disclose in court the trade secrets it claims that Microsoft misappropriated. How can Apple's information be protected?

Question 24

ABC Inc. hired Kaitlyn in 2014. In 2016, the company presented her with a noncompete agreement and said, "Here-sign this." Kaitlyn was concerned she'd be fired it she did not sign the agreement, so she signed it. Discuss whether the agreement is valid.

Question 25

ABC Inc. inadvertently sent a critically important document outlining its plans to open several new stores in the East to its biggest competitor, XYZ. The document was given to an ABC summer student intern who mistakenly emailed it to XYZ. Discuss whether trade secret status has been destroyed and whether XYZ may use the information.

Question 26

The wrongful taking of a trade secret is usually referred to as ______ .

Question 27

A court has determined that a period of non competition (three years) is too long, so it is reforming the agreement to "save" the agreement and make it fit the parties' intentions. This action by the court is called ______ .

Question 28

Discuss whether a contractual provision which states, "Employee must maintain all Employer's trade secrets in confidence" would be enforceable.

Question 29

Hank sent an unsolicited manuscript for a new sitcom to ABC. Hank heard nothing from ABC, but the next year he discovered that ABC's new sitcom bears an uncanny resemblance to the sitcom in the manuscript he sent to ABC. Discuss whether Hank has any rights against ABC and what theories courts rely on in such cases.

Question 30

Why do many states strongly disfavor noncompete agreements and why do courts construe such agreements very strictly?

Question 31

Some agreements drafted by employers include a ______ clause by which the employee agrees that he or she assigns to the employer not only inventions made during the period of employment but those invented for some period after employment has terminated.

Question 32

Jack purchased a computer printer. It is not protected by patent. If Jack is able to easily disassemble the printer and make a copy of the device, has he violated any trade secrets? Discuss.

Question 33

Most companies require their employees to sign agreements relating to the confidentiality of information. There are usually four topics that are covered by such agreements. Identify three of these topics.

Question 34

LMN needs information about ABC's plans to expand. Thus, it has asked some of its employees to hang out at a bar near LMN and to buy drinks for LMN employees in the hopes of getting these employees "tipsy" enough to disclose these plans to LMN. If LMN acquires the information, can it freely use it? Discuss.

Question 35

What new "extraordinary" remedy is available under the Defend Trade Secrets Act of 2016 that is not available under state trade secret acts?

Question 36

Apple is planning the launch of a new cell phone. Those who have access to the information about the product use computers that are not password protected, have no virus protection, and are not encrypted. Discuss whether Apple's approach is sufficient to protect the information.

Question 37

What relationship might exist between the time it takes to train a new or replacement employee and the period of time within which an employee cannot compete against a former employer?