I love the expression “perfect is the enemy of good”. This means that if you insist on everything being absolutely perfect, nothing will actually get done including perfectly good improvements. The expression goes back to at least 1772 in a poem “La Begueule” by Voltaire. While the poem certainly wasn’t about confidential information and trade secrets, the expression applies perfectly.
None of the trade secret statutes require perfection in protecting your valuable trade secrets. The standard of care required is “reasonable measures”, not “ultimate measures” or “perfect measures” (see, for example, the US DTSA at 18 U.S.C. 1839(3)(A) and UTSA § 1(4)(ii)).
Many people starting their trade secret journey become paralyzed by fear, opting to do nothing. They ask many hypothetical “what if” questions like “what if I miss cataloging one trade secret?” or “what if an employee does not complete the trade secret training course?” or “what if a contributor does not acknowledge that the asset is a trade secret?”. They end up doing nothing to protect these valuable assets.
Doing nothing can lead to disastrous results.
In RV Horizons, Inc. v. Smith, the defendant prevailed at summary judgment because RV Horizons did not provide specific evidence of limiting access to the contested investor lists, no evidence of confidentiality agreements, employee handbooks, or training, and no evidence that RV Horizons ever told the defendants that the investor lists were trade secrets. See Civ. A. No. 18-cv-02780-NYW, 2020 WL 6701119, at *26-27 (D. Colo. Nov. 13, 2020).
Many other examples exist – doing nothing gets you nothing in protecting your assets.
Be reasonable at the very least
The reality is “reasonable measures” is not clearly defined anywhere, and are fact- and situation-dependent. There can be many factors to decide what level of effort is “reasonable”. Does the company have many or few trade secrets? Is the industry very competitive with lots of corporate espionage and employee poaching? Is the company a huge multinational with lots of resources or a startup with two people in a garage struggling to survive?
Certainly doing nothing is not reasonable. You can always provide more-than-reasonable protection to your trade secrets, but at least take reasonable steps.
Courts do not require perfection.
A classic hallmark case dates all the way back to 1970 in E.I. du Pont deNemours & Co. v. Christopher. Here, the defendant flew over a du Pont facility that was under construction and took aerial photos to learn about du Pont’s manufacturing process trade secrets. The court held that “Reasonable precautions against predatory eyes we may require, but an impenetrable fortress is an unreasonable requirement, and we are not disposed to burden industrial inventors with such a duty in order to protect the fruits of their efforts.” See 431 F.2d 1012 (5th Cir. 1970).
Get started on protecting your confidential information and trade secrets. You can begin by cataloging your assets, the people who have access, and the contracts providing confidentiality. You can train your staff so they know what to do (and what not to!) with your trade secrets.
Don’t’ let fear of not achieving perfection stop you from doing a good or even great job in protecting your assets.