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2019 Trade Secret Law Developments

January 22, 2020
Post by Jonathan L. Kennedy

Since the passage of the Defend Trade Secrets Act (“DTSA”) in 2016, there have been questions as to how the law would be applied in trade secret litigations. 2019 provided indicators on some trends in the application of the law as well as its interplay with state trade secret claims. Two issues of particular relevance were (1) interpretation of the timing requirements for filing a claim for trade secret misappropriation, and (2) application of the requirement that trade secrets be subject to reasonable measures to maintain secrecy.

Timing Requirements for Filing a Claim

In CMI Roadbuilding, Inc. v. Iowa Parts, Inc., 920 F.3d 360 (8th Cir. 2019), the Eighth Circuit interpreted the DTSA’s statute of limitations provision. The statute states, “A civil action . . . may not be commenced later than 3 years after the date on which the misappropriation . . . is discovered or by the exercise of reasonable diligence should have been discovered.” 18 U.S.C. § 1836(d) (2019). The statute continues noting “a continuing misappropriation constitutes a single claim of misappropriation.”Id. In CMI Roadbuilding, the plaintiff filed suit against Iowa Parts in 2016 alleging trade secret misappropriation for Iowa Parts’ alleged use of CMI’s component part technology which began in 2002. The district court record identified multiple instances from 2002 to 2014 where it found that CMI knew or reasonably should have known that Iowa Parts had been utilizing the alleged trade secret technology. The Eighth Circuit affirmed dismissal of CMI’s claims under the DTSA holding those claims were barred by the statute of limitations.

The Eighth Circuit’s provided guidance to trade secret owners stated, “At the point [CMI Roadbuilding] was on notice there was a possible problem, it had a duty to investigate, regardless of its exact knowledge.” Thus, once a trade secret holder has reason to believe a trade secret may have been misappropriated, the owner has a duty to investigate that suspicion and that investigation should commence promptly.

Notable Cases Interpreting the Reasonable Measures Requirement

The DTSA requires that for something to be considered a trade secret, the owner must have “taken reasonable measures to keep such information secret.” 18 U.S.C. § 1839(3)(A) (2019). Trade secret owners often wonder what measures are sufficient to comply with this requirement. In Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp. 3d 888 (N.D. Ill. 2019), the Northern District of Illinois denied the plaintiff’s motion for preliminary injunction finding the plaintiff did not demonstrate a likelihood of success on the merits. This ruling was based on the Court’s finding that the plaintiff “took almost no measures to safeguard the information . . . [and failed] to adopt even fundamental and routine safeguards for the information at issue.” 364 F. Supp. 3d at 898. The Court noted the plaintiff did not require confidentiality or non-disclosure agreements, did not they train its staff regarding treatment of confidential information, and only had a vague and general confidentiality policy in its employee manual.

In contrast the Middle District of Alabama denied a motion to dismiss a trade secret claim.S. Field Maint. & Fabrication LLC v. Killough, Case No. 2:18-cv-581-GMB, 2019 U.S. Dist. LEXIS 13826 (M.D. Ala. 2019). Here the defendant alleged that Southern Fields had failed to maintain reasonable measures because it did not consistently mark documents as “confidential.” The District Court found that Southern Fields’s complaint established sufficient reasonable means to deny the motion despite failure to consistent mark documents as “confidential.” Specifically, the Court cited Southern Field’s marking of some documents as “confidential,” password-protecting documents, keeping documents in a locked area or limited access server, limiting access to the documents to authorized personnel only, and instructing the authorized personnel as to confidentiality obligations.

These decisions demonstrate the courts’ factually specific inquiry as to what constitutes reasonable measures on a case-by-case basis. Whether efforts to maintain secrecy are sufficient to satisfy the reasonable measures requirement can be significantly dependent on the nature of the information and facts surrounding the business and practicalities of how to maintain secrecy. Should you have information you wish to maintain as a trade secret, it is highly important that you speak with your attorney to ensure proper efforts are being made to maintain the secrecy of that information.


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The attorneys of McKee, Voorhees & Sease, P.L.C. designed this blog as an informational and educational resource about intellectual property law for our clients, other attorneys, and the public as a whole. Our goal is to provide cutting-edge information about recent developments in intellectual property law, including relevant case law updates, proposed legislation, and intellectual property law in the news.

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