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3 Elements

3 Elements. A Valuable Trade Secret Wrongfully Acquired Reasonable Precautions. Restatement of Torts (1939). (See Metallurgical case p. 42)

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3 Elements

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  1. 3 Elements A Valuable Trade Secret Wrongfully Acquired Reasonable Precautions

  2. Restatement of Torts (1939) (See Metallurgical case p. 42) “A trade secret may consist of any formula, pattern, device, or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device or a list of customers.”

  3. Restatement 3rd of Unfair Competition “A trade Secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others.”

  4. Uniform Trade Secrets Act(1985) “Trade Secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use…”

  5. Restatement Unfair Competition Comment: “When the information is readily ascertainable from [public] sources, however, actual resort to the public domain is a mere formality thatshould not determine liability”

  6. New Unfair Competition Restatement While precautions are relevant for determining whether the info qualifies for trade secret protection, if value and secrecy are clear evidence of precautions may be unnecessary

  7. New Unfair Competition Restatement Nondisclosure agreements which purport to protect infomration in the public domain may be unenforceable as an unreasonable restraint of trade [another part of the restatement] “because of the public interest in preserving access to information that is in the public domain, such an agreement will not ordinarily estop a defendant from contesting the existence of a trade secret.”

  8. NARROWEST RULE FROM THE VAN ZEELAND CASE: Contracts cannot restrict employee use of customer lists when info is available in public domain

  9. Van ZeelandPossible Broader Rule Contracts cannot restrict worker use of customer lists beyond restrictions in trade secret law

  10. Van ZeelandBroader still: Contracts cannot restrict use of customer lists beyond the restrictions in trade secret law

  11. Van ZeelandBroadest Rule Contracts cannot restrict anyone’s use of information beyond what is provided in trade secret law.

  12. CALIFORNIA (Bus. & Prof. Code 16600) every contract restraining someone from engaging in a bus or profession is void (courts have read this to allow restrictions ancillary to sale of a business; if the restriction is narrowly defined)

  13. TEXAS (bus. & Coom. Coe. Ann. 15.50) Covenants not to compete are lawful if contain reasonable limitations on time, scope, and area of restraint

  14. Rogers Test Trademark use will only violate the Lanham act if the use of the trademark has 1) no artistic relevance to the underlying work OR, 2) if it does have relevance, • it misleads as to the source

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