MIAMI BUSINESS LITIGATION: TRADE SECRET INFORMATION THAT IS READILY ASCERTAINABLE

It is no surprise that trade secrets must be secret to qualify as a trade secret. But what does not that mean? Statutes like Florida’s Uniform Trade Secret Act dictate that trade secrets must “derive[ ] independent economic value… from not being generally known to, and not being readily ascertainable by proper means by, other persons… and [must be] the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Fla. Stat. § 688.002. Determining what is, and is not, “readily ascertainable” can be tricky. In this article, we provide some guidance on the subject to help you determine whether the information you possess qualifies as a trade secret. The Miami business litigation attorneys of the Mavrick Law Firm represent 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.

It is clear from the definition of trade secret that one cannot misappropriate information that is already readily ascertainable. Fin. Info. Techs., LLC v. iControl Sys., USA, LLC, 21 F. 4th 1267 (11th Cir. 2021). However, a trade secret is not nullified simply because certain parts are publicly known or readily ascertainable so long as the public information is arranged in a unique format. See Capital Asset Research Corp. v. Finnegan, 160 F.3d 683, 686 (11th Cir. 1998) (“Even if all of the information is publicly available, a unique compilation of that information, which adds value to the information, also may qualify as a trade secret.”). Consequently, information is still considered a trade secret even though a portion of it is readily ascertainable.

To illustrate this point, we cite La Potencia, LLC v. Chandler, 733 F. Supp. 3d 1238 (S.D. Fla. 2024). The plaintiff in Chandler manufactured baseball bats and claimed a competitor stole its trade secret baseball bat making formula. Defendants defended the lawsuit by arguing all of the bat making ingredients are publicly known or used by other baseball bat manufacturing companies. The plaintiff tried to counter by presenting a generic description of its finish and coating formula. However, the generic description did not qualify as a trade secret because it was known throughout the industry.

Contrast Chandler with Fin. Info. Techs., LLC v. iControl Sys., USA, LLC, 21 F. 4th 1267 (11th Cir. 2021). In iControl, the defendant tried to assert that the software in question was readily ascertainable because it was sold to the public and could be reverse engineered. However, the plaintiff presented evidence demonstrating the defendant could not reverse engineer the software without the help of the plaintiff’s former employee. That former employee also made the software work after reverse engineering it by fixing some of the problems the plaintiff initially encountered when the software was created. The court determined this evidence demonstrated the software in question was not readily ascertainable even though it was publicly sold on the market.

The two examples provided above highlight the importance of ensuring that the confidential aspects of one’s trade secret remain secret even if other aspects of the trade secret are readily ascertainable. Keeping the non-ascertainable portions of a trade secret confidential cloaks the entirety of the information with trade secret status. This status confers the trade secret holder with rights he or she would not otherwise have to protect the information from unwanted disclosure.

The Miami business litigation lawyers of the Mavrick Law Firm also represent 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.