Opinion ID: 2144201
Heading Depth: 1
Heading Rank: 3

Heading: Improper use of trade secrets

Text: United argued at trial that Nelson had appropriated United's trade secrets, or confidential information, and used them to United's detriment. The information allegedly appropriated by Nelson was United's: financial condition, customer buying habits, contract terms, grades of rice, price information, inventory amounts. There was much evidence introduced at trial that the above listed information would give another marketer a competitive advantage over United. This, however, is an insufficient basis on which to premise an injunction. This court set out the test for determining which information is confidential or a trade secret in Cherne Industrial, Inc. v. Grounds & Associates, Inc., 278 N.W.2d 81 (Minn.1979). There we stated that: Certain common elements can be distilled from these definitions and fashioned into a workable test encompassing both concepts [trade secrets and confidential information]. The elements comprising that test are: (1) the protected matter is not generally known or readily ascertainable, (2) it provides a demonstrable competitive advantage, (3) it was gained at expense to the employer, and (4) it is such that the employer intended to keep it confidential. Id. at 90. The legislature has since statutorily defined trade secret. Trade secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Minn.Stat. § 325C.01(5) (1980). The statutory definition mirrors that set out in Cherne. Under this definition, the information is not confidential. United is a cooperative made up of individual farmer members who grow rice. It is run by a Board of Directors, with the general manager at the helm. Each piece of information United classifies as confidential is made freely available to every individual member of the cooperative. The information is discussed at Board meetings and members are welcome to attend these meetings. In short, although Nelson, as general manager, had access to this information, so did every member of the cooperative. This is true even though some members may have been in competition with the cooperative at the same time they were members. Were this court to hold that such freely available information is confidential, United might be then in a position to have each member of the cooperative restrained from competing. Therefore, United has clearly failed to make reasonable efforts to maintain the secrecy of this information. This confidential information would properly be the subject of a convenant not to compete, not a charge of unfair competition. This is especially true in situations such as presented by the instant case where the market is small and one concern holds a large portion of that market.