Trade Secrets
California's version of the Uniform Trade Secrets Act defines a trade secret as follows in Civil Code Section 3426.1(d):
"Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Civil Code Section 3426.1 defines "improper means" as including theft, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means as improper. Only reverse engineering or independent derivation alone shall not be considered improper means.
In order to achieve status as a trade secret, the item or process must be secret from the masses. It should only be available on a need to know basis, and should be locked up, password protected or encrypted. Disputes involving trade secrets frequently revolve around customer lists. If a customer list has information that can be readily discerned through public lists, such as yellow pages, it may not be protectable.
Disputes over trade secrets are generally resolved very quickly, since courts will often issue injunctions to halt illegal or offensive actions that result in a misappropriation of the trade secret. The penalty for misappropriation of a trade secret can be actual damages plus treble damages.
