Washington Administrative Code › Title 296 - Labor and Industries, Department of › Chapter 296-901 - Globally harmonized system for hazard communication › Section 296-901-14030 - Appendix E - Definition of "trade secret."

Current through Register Vol. 24-14, July 15, 2024
The following is a reprint of the "Restatement of
				Torts" section 757, comment b (1939):
b. "Definition of trade secret." 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 formula for a chemical compound, a process of manufacturing,
				treating or preserving materials, a pattern for a machine or other
				device, or a list of customers. It differs from other secret
				information in a business (see s759 of the Restatement of Torts which
				is not included in this Appendix) in that it is not simply
				information as to single or ephemeral events in the conduct of the
				business, as, for example, the amount or other terms of a secret bid
				for a contract or the salary of certain employees, or the security
				investments made or contemplated, or the date fixed for the
				announcement of a new policy or for bringing out a new model or the
				like. A trade secret is a process or device for continuous use in the
				operations of the business. Generally it relates to the production of
				goods, as, for example, a machine or formula for the production of an
				article. It may, however, relate to the sale of goods or to other
				operations in the business, such as a code for determining discounts,
				rebates or other concessions in a price list or catalogue, or a list
				of specialized customers, or a method of bookkeeping or other office
				management.
"Secrecy." The subject matter of a trade secret must
				be secret. Matters of public knowledge or of general knowledge in an
				industry cannot be appropriated by one as his secret. Matters which
				are completely disclosed by the goods which one markets cannot be his
				secret. Substantially, a trade secret is known only in the particular
				business in which it is used. It is not requisite that only the
				proprietor of the business know it. He may, without losing his
				protection, communicate it to employees involved in its use. He may
				likewise communicate it to others pledged to secrecy. Others may also
				know of it independently, as, for example, when they have discovered
				the process or formula by independent invention and are keeping it
				secret. Nevertheless, a substantial element of secrecy must exist, so
				that, except by the use of improper means, there would be difficulty
				in acquiring the information. An exact definition of a trade secret
				is not possible. Some factors to be considered in determining whether
				given information is one's trade secret are:
(1) The extent to which the information is known
				outside of his business;
(2) the extent to which it is known by employees and
				others involved in his business;
(3) the extent of measures taken by him to guard the
				secrecy of the information;
(4) the value of the information to him and his
				competitors;
(5) the amount of effort or money expended by him in
				developing the information;
(6) the ease or difficulty with which the information
				could be properly acquired or duplicated by others.
"Novelty and prior art." A trade secret may be a
				device or process which is patentable; but it need not be that. It
				may be a device or process which is clearly anticipated in the prior
				art or one which is merely a mechanical improvement that a good
				mechanic can make. Novelty and invention are not requisite for a
				trade secret as they are for patentability. These requirements are
				essential to patentability because a patent protects against
				unlicensed use of the patented device or process even by one who
				discovers it properly through independent research. The patent
				monopoly is a reward to the inventor. But such is not the case with a
				trade secret. Its protection is not based on a policy of rewarding or
				otherwise encouraging the development of secret processes or devices.
				The protection is merely against breach of faith and reprehensible
				means of learning another's secret. For this limited protection it is
				not appropriate to require also the kind of novelty and invention
				which is a requisite of patentability. The nature of the secret is,
				however, an important factor in determining the kind of relief that
				is appropriate against one who is subject to liability under the rule
				stated in this Section. Thus, if the secret consists of a device or
				process which is a novel invention, one who acquires the secret
				wrongfully is ordinarily enjoined from further use of it and is
				required to account for the profits derived from his past use. If, on
				the other hand, the secret consists of mechanical improvements that a
				good mechanic can make without resort to the secret, the wrongdoer's
				liability may be limited to damages, and an injunction against future
				use of the improvements made with the aid of the secret may be
				inappropriate.
Statutory Authority:
				  RCW 49.17.010,
				  49.17.040,
				  49.17.050,
				  49.17.060 and  29 C.F.R.
				  1910  Subpart Z. 13-06-050, § 296-901-14030, filed 3/5/13,
				  effective 4/15/13.