Opinion ID: 3010675
Heading Depth: 2
Heading Rank: 2

Heading: What constitutes a trade secret

Text: The EEA defines a trade secret to expressly extend protection to the misappropriation of intangible information for the first time under federal law. 18 U.S.C. S 1839(3) provides that a trade secret means: _________________________________________________________________ 9. Section 1832 also imposes more lenient punishments than S 1831. Under S 1832, individuals can be sentenced to ten years in prison and/or fined $250,000, and organizations can befined up to $5 million. Section 1831, however, provides that individuals can be imprisoned for fifteen years and/or fined $500,000, and organizations can be fined a maximum of $10 million. Moreover, under both sections, defendants are subject to criminal forfeiture pursuant to 18 U.S.C.S 1834, which states that a person or entity shall forfeit any property constituting, or derived from, the proceeds of an EEA crime, and, if the sentencing court in its discretion so determines, any property used, or intended to be used, to commit or facilitate an EEA offense. 11 all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if -- (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public. The EEA's definition of a trade secret is similar to that found in a number of state civil statutes and the Uniform Trade Secrets Act (UTSA), a model ordinance which permits civil actions for the misappropriation of trade secrets.10 There are, though, several critical differences which serve to broaden the EEA's scope. First, and most importantly, the EEA protects a wider variety of technological and intangible information than current civil laws. Trade secrets are no longer restricted to formulas, patterns, and compilations, but now include programs and codes, whether tangible or intangible, and whether or how stored. Second, the EEA alters the relevant party from whom proprietary information must be kept confidential. Under the UTSA, information classified as a trade secret cannot be generally known by businesspersons or _________________________________________________________________ 10. For example, S 1(4) of the UTSA states that a trade secret includes: 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. 12 competitors of the trade secret owner. UTSA S 1(4). The EEA, however, indicates that a trade secret must not be generally known to, or readily ascertainable by, the general public, rather than simply those who can obtain economic value from the secret's disclosure or use. Finally, the EEA contains a definition crafted to reach only illicit behavior. Although legislators eliminated language providing that general knowledge, skills, and experience are nottrade secrets, 142 Cong. Rec. S12,213 (daily ed. Oct. 2, 1996) (Managers' Statement), it is clear that Congress did not intend the definition of a trade secret to be so broad as to prohibit lawful competition such as the use of general skills or parallel development of a similar product. See, e.g., id. at S12,212 (noting that [t]his legislation does not in any way prohibit companies, manufacturers, or inventors from using their skills, knowledge and experience to solve a problem or invent a product that they know someone else is working on).