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2 18 U.S.C. § 1839(5).
Energy & Intellectual Property
secrets and requires, as a condition of the contractual relationship, that the third party agree to keep the information confidential and to not use or disclose the information for reasons unrelated to their tasks undertaken on behalf of the owner of the trade secret.
Furthermore, most trade secrets are stored electronically. It is important that access to that information is closely restricted. Some of these restrictions relate to who can access the information. For example, employees and contractors who do not have a need to access the information should be excluded from the ability to view or download the information on shared systems. Additionally, for those who do require access to the trade secrets, strict security protocols should be in place such as two factor authentication and access logs to determine who has accessed the trade secrets and when such access took place. Although not required by the statute, periodic audits of the access records can identify access issues and possibly prevent theft of the information.
WHAT IS MISAPPROPRIATION?
It is not enough that another person or entity is in possession of another’s trade secret. Under the DTSA, the information, assuming it qualifies for trade secret status, must be “misappropriated.” Misappropriation is defined as:
(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(B) disclosure or use of a trade secret of another without express or implied consent by a person who--
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was--
(I) derived from or through a person who had used improper means to acquire the trade secret;
(II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or
(III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or
(iii) before a material change of the position of the person, knew or had reason to know that--
(I) the trade secret was a trade secret; and
(II) knowledge of the trade secret had been acquired by accident or mistake;2
Accordingly, the three bases for misappropriation are acquisition, disclosure, and use. With respect to
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FDCC ANNUAL INSIGHTS 2023