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Do You Have A Trade Secret?
Thadford A. Felton
Arnstein & Lehr LLPChicago
 
Thadord A. Felton
120 S. Riverside PlazaSuite 1200Chicago, Illinois 60606(312) 876-6934taelton@arnstein.com
Copyright 2008, Thadford A FeltonAll Rights Reserved
 Thad Felton is a Partner in Arnstein & Lehr’s Complex LitigationGroup. As a lawyer and counselor, he has extensive experiencerepresenting clients in a broad range o complex commercial andbusiness tort matters. Mr. Felton has experience advising publicand privately-held businesses, and individuals, in managingand identiying a broad range o legal issues, negotiating anddocumenting transactional matters and advising on day-to-day operations issues. He has litigated in the areas o raud,misrepresentation, raudulent transer and consumer raudact claims; breach o contract claims, including issues relatedto intererence with contract and prospective economicadvantage; misappropriation o trade secrets; injunctive andequitable remedies, with a ocus on the enorceability o restrictive covenants; breach o duciary duty matters; productsliability; declaratory judgments; section 1983 civil rights matters;creditor’s rights; and complex insurance coverage disputes,including the availability o coverage or environmental claims.
 
 
 Thadford A Felton . Do You Have A Trade Secret?
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ost business people believe that their businesses have important condential inormation which mustbe protected rom competitors. Obvious examples are secret ormulas such as how to make certaincola drinks or mix ragrances. But what about customer lists, customer ordering patterns or preerences,pricing ormulas, product designs, sales or merchandising strategies, and the like? Most business peoplewould not dream o discussing these things with a competitor. But when an employee resigns or is red,these things may be disclosed to competitors or the employee may become the competitor. So what isa business person to do? Ater all, most business people believe that everything about their business is atrade secret. They may be in or unpleasant surprises. Just because a business labels something a tradesecret, does not mean that a court will recognize it as a trade secret. The goal o this article is to give you abetter understanding o what actors courts look at to determine whether one has a trade secret and whatyou and your business can do to increase the chance o the court nding that you have a trade secret.
Defnition O A Trade Secret?
In Illinois the denition o is very broad. Illinois, like 43 other states, adopted the Uniorm Trade Secret Act("Act"). The Illinois version o the Act denes a trade secret:inormation, including but not limited to, technical or non-technical data, a ormula, pattern, compilation,program, device, method, technique, drawing, process, nancial data, or list o actual or potential custom-ers or suppliers, that: (a) is suciently secret to derive economic value, actual or potential, rom not beinggenerally known to other persons who can obtain economic value rom its disclosure or use; and (b) is thesubject o eorts that are reasonable under the circumstances to maintain its secrecy or condentiality.While not determinative, the courts in Illinois look to the ollowing actors to assist them in determining theexistence o a trade secret:(1) The extent to which inormation is known outside o the business;(2) The extent to which the inormation is known by employees and others involved in the business;(3) The extent o measures taken to guard the secrecy o the inormation;(4) The value o the inormation to the business and competitors;(5) The amount o eort or money expended by the business in developing the inormation; and(6) The ease or diculty with which the inormation could be properly acquired or duplicated by others.In sum, whether the inormation sought to be protected qualies as a trade secret depends undamentallyon the secrecy o such inormation.
You Need To Be Able To Specifcally Defne Your Trade Secret.
While it may be stating the obvious, beore one can determine whether one has a trade secret, one has to beable to specically identiy the thing that is claimed to be a trade secret. Dening the trade secret in gener-alities such as business and strategic planning inormation, manuacturing inormation, capacity inorma-tion, marketing inormation, customer inormation and costs, without more, is insucient. Whether you arepreparing an employment agreement with a clause regarding trade secrets and/or condential inormationor suing to stop an employee or third party rom taking your trade secret, you must be able to specicallyidentiy the trade secret. The more specically you dene the trade secret, the better o you will be.
What Is Not A Trade Secret.
Because trade secret protection depends on both the nature o the inormation and its secrecy, it is impor-
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