Opinion ID: 877457
Heading Depth: 1
Heading Rank: 1

Heading: trade secrets as property

Text: We are given no record here as to what it is we have categorized as trade secret; that is, whether it is an idea, design, system or implement, or combination of these. The respondents make no point of this, conceding, and we accept their concession, that some process resulting from Mountain Bell's research and development gives Mountain Bell a competitive edge as to the communications services it offers. This however, leads respondents to the argument that disclosure of the trade secret does not necessarily deprive Mountain Bell of the use of its trade secret. Regardless of disclosure, say the respondents, Mountain Bell still has the use of its trade secret available and that disclosure therefore does not take away from Mountain Bell any property of value. On that basis, respondents claim that the trade secret as such is not entitled to constitutional protection. The intervenors point out that the respondents have not appealed from the finding of the District Court that trade secrets are protectable property. However, a determination that a trade secret is protectable property is sine qua non to our decision and in any event, is a matter which we must consider under Rule 14, M.R.App. Civ.P. To be short about it, we agree with the District Court, which pointed out that the Ninth Circuit case of Tri-Tron Intern. v. Velto (9th Cir.1975), 525 F.2d 432, upheld the decision of the Montana Federal District Court recognizing as a compensable tort the deprivation of a trade secret through a breach of faith. Also, the Montana Rules of Civil Procedure recognize trade secrets as protectable. Rule 26(c)(7), M.R.Civ.P. The District Court concluded: To insist in the face of all this that Montana, or any other state, should eschew recognition of a trade secret as property would be to insist on a legal fabrication unsullied by reality. District Court Opinion and Order, dated October 2, 1980. It is obvious to us that a trade secret which is used in one's business, and which gives one an opportunity to obtain an advantage over competitors who do not know or use it, is private property which could be rendered valueless or of less value to its owner if disclosure of the information to the public and to one's competitors were compelled. Surely, if an individual owned a trade secret and sought protection against compelled disclosure, we would hold such private property protectable under the exception in 1972 Mont.Const., Art. II, § 9, (cases in which the demand of individual privacy clearly exceeds the merits of public disclosure), to the extent necessary under the circumstances. Whether a corporate owner of a trade secret is entitled to the same exception we will discuss below.