MIAMI BUSINESS LITIGATION: PROVING TRADE SECRETS AND MEASURES TO RETAIN SECRECY

Under Florida law, a “trade secret” must be a “secret” to the extent it is not generally know, and where the owner has taken reasonable efforts to maintain its secrecy. Florida law (at Section 688.002(4), Florida Statutes) defines a “trade secret” to mean “information, including a formula, pattern, compilation, program, device, method, technique, or process that (a) derives 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 (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Florida, as with most states, operates under the Uniform Trade Secrets Act, which sets forth the elements of trade secret protection and legal remedies for misappropriation. Therefore, the body of law from courts outside of Florida which operate under the Uniform Trade Secrets Act are often persuasive to Florida courts. Peter Mavrick a Miami business litigation attorney, and represents clients in Fort Lauderdale, 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.

The burden of proof is on the plaintiff to establish that a trade secret exists and that it is not known in the industry. Eaton Corp. v. Appliance Valves Corp., 526 F.Supp. 1172 (N.D. Ind. 1981). The The Fifth Circuit United States Court of Appeals in Cataphote Corp. v. Hudson, 444 F.2d 1313 (5th Cir. 1971), explained that although a trade secret does not require the uniqueness or novelty of a patent, “it must possess at least that modicum of originality which will separate it from everyday knowledge.” Information which is too generally known to derive value from secrecy is unable to obtain trade secret protection even without disclosure. For example, the United States District Court for the Southern District of California in Designs Art v. NFL Props., Inc., 2000 WL 1919787 (S.D. Cal. Nov. 27, 2000), held that the idea of a tiger for a logo for the Cincinnati Bengals does not merit trade secret protection because the idea of using the subject of a corporate name as a logo for that entity is generally known. By contrast, the Fifth Circuit in FMC Corp. v. Varco Int’l, Inc., 677 F.2d 500 (5th Cir. 1982), explained that a process used in manufacturing or developing a product may rise to the level of a trade secret, even if similar products are on the market, as long as the precise method used in the process is not known in the industry. Whether information is a secret “is a relative concept and requires a fact-intensive analysis.” Premier Displays & Exhibits v. Cogswell, 2009 WL 8623588 (C.D. Cal. Dec. 23, 2009).

Courts have held that reasonable efforts to maintain secrecy include “advising employees of the existence of a trade secret, limiting access to a trade secret on ‘need to know basis,’ and controlling plant access.” Courtney Temp. Serv., Inc. v. Leonel Camacho, 222 Cal.App.3d 1278 (1990). A trade secret will be protected from disclosure to the owner’s competitor even in the absence of a written agreement. Salisbury II, 735 F.Supp. 1545 (M.D. Ga. 1988). The critical issue to secrecy is that reasonable measures are in place that will retain secrecy within the organization, including measures to avoid public disclosure, inadvertent disclosure, and intentional disclosure, as well as efforts to limit who in the organization has access to the trade secrets and on what terms.

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