FORT LAUDERDALE BUSINESS LITIGATION: IDENTIFYING TRADE SECRETS UNDER FUTSA

In business litigation, Florida courts require plaintiffs to describe their alleged trade secret with a certain degree of particularity. Failing to do that can be fatal to trade secret claims. A plaintiff does not only have to prove that certain confidential information was misappropriated, but it must also prove that the misappropriated information actually qualifies as a trade secret under Florida or federal law. To establish its claim for trade secret misappropriation, the party must adequately explain what information qualifies as trade secret and why the alleged confidential information’s secrecy makes the trade secret valuable to a business. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Florida’s Uniform Trade Secret Act (FUTSA) defines a trade secret as as “information, including a formula, pattern, compilation, program, device, method, technique, or process that [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Section 688.002(4), Florida Statutes. Misappropriation under FUTSA also includes circumstances when a party simply possesses the trade secret material. Section 688.002(2), Florida Statutes.

Business litigation plaintiffs asserting trade secret misappropriation claims must show that what was taken is valuable because it is secret. Plaintiffs are also required to show that they acted reasonably when trying to keep its information secret. Trade secret misappropriation claims inherently fail when the litigants do not demonstrate that the allegedly misappropriated information qualifies as a trade secret. “In order to ascertain whether trade secrets exist, the information at issue must be disclosed.” Lovell Farms, Inc. v. Levy, 641 So. 2d 103 (Fla. 3d DCA 1994). “The plaintiff must, as a threshold matter, establish that the trade secret exists. To do so, it must disclose the information at issue.” Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So. 3d 678 (Fla. 2d DCA 2010).

“[I]t is insufficient to describe the trade secrets by generic category, such as the components of the night vision devices to which the alleged trade secrets relate. Rather, [plaintiff] must identify the specific characteristics of each trade secret, such as a particular drawing, process, procedure or cost/pricing data. It must also describe with reasonable particularity all of its trade secrets, including those involving ‘business methods, know-how, machines, manufacturing process and procedure, marketing information, pricing data, product designs and manufacturing information.” Knights Armament Co. v. Optical Sys. Tech., Inc., 254 F.R.D. 463 (M.D. Fla. 2008).

At the pleading stage, a “plaintiff need only allege sufficient facts to plausibly show a trade secret was involved and to give the defendant notice of the material it claims constituted a trade secret.” DynCorp Int’l v. AAR Airlift Group, Inc., 664 Fed. Appx. 844 (11th Cir. 2016). However, “a plaintiff is required to identify with reasonable particularity the trade secrets at issue before proceeding with discovery.” AAR Mfg., Inc. v. Matrix Composites, Inc., 98 So. 3d 186 (Fla. 5th DCA 2012). Federal courts analyzing the Uniform Trade Secret Act, which was also adopted in Florida, agree with this standard. For example, in Composite Marine Propellers, Inc. v. Van Der Woude, the Seventh Circuit Court of Appeals expressly held that it “is not enough to point to broad areas of technology and assert that something there must have been secret and misappropriated. The plaintiff must show concrete secrets.” Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir. 1992). Composie Marine ultimately reversed a jury verdict because there was insufficient evidence identifying the allegedly confidential information as a trade secret.

Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.