Also known as: reasonable steps for maintaining secrecy · reasonable efforts to maintain secrecy · reasonable efforts · secrecy measures · trade secret protection steps
Written by attorneys · grounded in primary & secondary sources — see below
An owner's measures to keep information confidential. These measures are required for trade secret protection when the information derives independent economic value from not being generally known or readily ascertainable.
Riverside Healthcare's outside counsel stored client medical records on a shared drive accessible only through unique logins and required encryption for all transmissions. An associate accidentally forwarded one file to an external vendor. The firm's access logs and encryption rules showed it had taken reasonable steps to maintain secrecy, so the information retained trade secret status despite the single breach.
Redwood Bank hired Robert Rivera as an agent to negotiate loan terms with borrowers. Rivera learned of a confidential interest-rate formula the bank used and failed to report it to supervisors even though the bank expected the information. Because Rivera did not use reasonable efforts to relay the formula, the bank could not rely on the agent's conduct to preserve confidentiality.
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Rising Sun Electronics sought to introduce an internal memo describing a proprietary circuit design. The memo was the most probative evidence available after the company had searched its files and contacted former employees. The court admitted the memo because it was more probative than any alternative source obtainable through reasonable efforts.
Regal Apparel's counsel learned that a competitor was about to disclose the company's fabric-weave formula in open court. Counsel immediately moved for a protective order and sealed the relevant exhibits. These prompt actions constituted reasonable steps consistent with the duty to expedite litigation while protecting client information.
Renee Rogers, an unrepresented supplier, asked Regal Apparel's lawyer about a secret dye formula used in the company's clothing line. The lawyer explained she represented only the company and advised Rogers to obtain counsel before discussing the formula. The lawyer's clear statement prevented any inadvertent disclosure.
A partner at the firm representing Rising Sun Electronics required all associates to use password-protected folders and to log every access to the client's proprietary software code. The partner also conducted quarterly audits. These firm-wide controls qualified as reasonable efforts to ensure compliance with professional obligations regarding confidential information.
The owner must take precautions that are reasonable under the circumstances, such as limiting access, using contracts, and monitoring disclosures. Absolute secrecy is not required.
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No. If the owner has implemented reasonable protective measures beforehand, an isolated breach does not automatically eliminate protection.
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Courts compare the owner's precautions against industry norms and the value of the information. Minimal or no restrictions weigh against protection while layered controls support it.
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