WHAT IS A TRADE SECRET? 150 150 Lauren Ellerman

Many Virginia employment agreements state the employee is prohibited from using or sharing any trade secret information, or proprietary information.

Well that is well and good, but what does that mean, “Trade Secret?”

Most states have law that defines what a trade secret is.

In Section 59.1-336 of the Virginia Act, a trade secret is defined as “information, including but not limited to, a formula, pattern, compilation, program, device, method, technique or process.”

That doesn’t help much, does it?

The Virginia Journal of Law and Technology (VJOLT) – an esteemed legal journal at UVA – provides a great summary of Va. Trade Secret Act law and cases in an article on their website: http://www.vjolt.net/vol5/issue3/v5i3a15-Babirak.html#IIIB.

In the article, Attorney Milton Babirak says ” Some common examples of low-tech trade secrets in published cases are: customer lists, business leads, financial information, marketing strategies, sales techniques and methods of conducting business. The definitions of trade secrets in the Virginia Act, Uniform Act and the Restatement are significant in several other respects as well. These definitions do not require that the information exist in some tangible format, as is the case in patent law. In fact, the information need not be more than an idea, theory or concept. Further, these definitions do not require that the trade secret be novel. Several courts have stated that novelty is not a requirement for a trade secret but that maintaining its secrecy is necessary. In addition, those definitions do not impose any limit on the length of time a trade secret can be protected. While patents may be protected by statute for twenty years, trade secrets may be protected as long as their secrecy is maintained, they are not generally known and they are not readily ascertainable. The Virginia Act and the Uniform Act do not require a profit motive for the misappropriation.”

Thank you Mr. Babirak – I know this is scary for Virginians looking for advice. It means the sky is the limit as far as information you cannot take…. so employees, be careful. You don’t have to write it down – memorizing customer list could be in violation…prices lists etc.

When I am defending a Trade Secret claim, the first thing I try to do is determine if the information at issue, is really “secret” or if it is open to the public. If it is open to all – the employer will have a difficult time proving the information is secret, and that any damages occurred as a result of its use.

For more information, check out the VJOLT article – it is a good one!

About the author

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.

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