Court Opinion

ID: 7846390
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:11:21.699731+00
Date Added: 2024-06-11T16:25:05.291815
License: Public Domain

MCDONALD, J.,
concurring in part and dissenting in part. I disagree with the majority’s conclusion upholding the trial court’s finding that the plaintiff, Elm City Cheese Company, Inc. (Elm City), was entitled to trade secret protection. The majority relies on the following factors to entitle Elm City to trade secret protection for its cheesemaking operation “as a whole”: (1) its purchase of returned milk from a number of dairies; (2) its production from that milk of hard grated cheese filler through a unique process; and (3) its sale of that filler to only three cheesemakers to blend into their cheeses.1
To qualify as a trade secret under General Statutes § 35-51 (d), the information in question must be “secret” and “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” “[E]mployee access to trade secrets is not inconsistent with . . . secrecy. But employees having such access should be *101carefully cautioned as to the trade secret status of matters on which they work.” 1 R. Milgrim, Trade Secrets (1999) § 1.04, pp. 1-190 through 1-191. “Although it is not essential that the proprietor have exclusive possession of the information, a substantial element of secrecy must exist, to the extent that there would be difficulty in acquiring the information except by the use of improper means.” (Internal quotation marks omitted.) Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525, 538, 546 A.2d 216 (1988).
Improper acquisition of trade secrets includes “theft, fraud, unauthorized interception of communications, inducement of or knowing participation in a breach of confidence, and other means either wrongful in themselves or wrongful under the circumstances of the case. Independent discovery and analysis of publicly available products or information are not improper means of acquisition.” Restatement (Third), Unfair Competition, Appropriation of Trade Values § 43 (1995). “The factors used to determine whether given information is a trade secret include the extent to which the information is known outside the business and by employees and others involved in the business, the measures taken by the employer to guard the secrecy of the information, the information’s value to the employer and to competitors, the resources the employer expends in developing the information, and the ease or difficulty with which the information could be properly acquired or duplicated by others ."Robert, S. Weiss & Associates, Inc. v. Wiederlight, supra, 208 Conn. 538. “Matters of public knowledge or of general knowledge in an industry cannot be appropriated by one as his secret.” Town & Country House & Homes Service, Inc. v. Evans, 150 Conn. 314, 318, 189 A.2d 390 (1963).
Under these principles, the purchase of returned milk from a number of dairies does not constitute a trade secret. It is well known that cheese is made from the *102pressed curds of milk. Webster’s Third New International Dictionary, p'. 382. A curd is produced when part of the milk is treated with rennet and sometimes fermented. P. Montagné, The New Larousse Gastronomique (1977) p. 208. “From the earliest times cheese has been made in stock-rearing countries to use up surplus milk.” Id., p. 207. Elm City is hardly entitled to trade secret protection for such a practice. It would also be surprising if very young children could not identify milk wholesalers and dairies as suppliers of milk. That stale milk, no longer having retail value, would be cheaper to purchase than fresh milk is also common knowledge. Moreover, there was no evidence before the trial court that Elm City did anything to safeguard the business practice of purchasing returned milk with which to make cheese. Elm City, in fact, had no restrictive agreement with any employee about anything.2 Thus, the purchase of returned milk from a number of dairies does not qualify as a trade secret.
With regard to the method of production of exclusively hard grated cheese filler, there was evidence that the techniques used to produce the cheese without creating a noxious odor and the use of air conditioning to speed the fermentation process may not be known commonly. Elm City, however, did nothing to keep its contractor’s inventions a secret, if indeed it could have done so in the absence of an agreement with the inventor. Furthermore, the inventor described the system at length at a public hearing before the department of environmental protection, and Elm City described this system in a pleading it filed with that department. Elm City did not request that the document be filed under *103seal. This production method, therefore, cannot be considered a trade secret.
Finally, Elm City’s sale of its product exclusively to three cheesemakers is not a trade secret. “There is no trade secret ... if [information] can readily be ascertained through ordinary business channels or reference resources.” Robert S. Weiss Associates, Inc. v. Wiederlight, supra, 208 Conn. 538. “[W]here the identity of the customers is readily ascertainable through ordinary business channels or through classified business or trade directories, the courts refuse to accord to the list the protection of a trade secret.” Town & Country House & Homes Service, Inc. v. Evans, supra, 150 Conn. 320. The identity of those who sell cheese containing the filler produced by Elm City could be ascertained easily through a visit to the grocer or the Italian deli. Here again, Elm City did nothing to protect the “secrecy” of the identity of its customers.
Because none of the three factors relied upon by the majority constitutes a trade secret alone or in combination, the information taken “as a whole” or in an “overall way” does not merit trade secret protection. As the majority admits, it is “not saying, however, that each and eveiy component is necessarily a trade secret in and of itself . . . .” The character of some nonsecret information does not change simply because it may be presented together with other nonsecret information. It is impossible to add three zeros and reach a sum greater than zero. See J. King, The Art of Mathematics (1992) p. 63. There could be no evidence that buying returned milk to make cheese, combined with selling cheese fillers to cheese manufacturers would be a trade secret. The “trade secret” protected by the majority is a true example of what Robert Milgrim, in his leading text, describes as “protection of the business rather than [of] ‘secrets’ ” where the “secret” information is *104“all-embracing with reference to any given enterprise . . . .” 1 R. Milgrim, supra, § 1.09 (8) (d), p. 1-470.
After concluding that Elm City is entitled to trade secret protection, the trial court enjoined the defendants Mark Federico and Lomar Foods, Inc., for aperiod of three years from, among other things, (1) developing or utilizing any information as to the manufacturing process and drying and odor control processes and equipment for the cheese produced by Elm City, (2) contracting with or divulging the identity of Elm City’s customers and (3) directly or indirectly selling any cheese product made like Elm City’s.3 In a trade secret case, the injunction should not be for a limited period of time unless the court finds that, in that time, the trade secrets would cease to exist. The remedy prescribed by Connecticut’s Uniform Trade Secrets Act provides: “Actual or threatened misappropriation may be enjoined upon application to any court of competent jurisdiction. An injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.” General Statutes § 35-52 (a). The three year limit on the injunction suggests that there are no trade secrets to be protected.
In sum, there can be no trade secrets in Elm City’s production methods or lists of suppliers and customers. Any other conclusion, as Justice Berdon points out, would turn employment with any industry into a universal contract not to compete and would completely restrict the rights of a former employee to use knowledge legitimately gained during employment. American *105law, up to date, recognizes no such wide-sweeping view of trade secrets for those activities. Trade secret law should not only encourage innovation but also maintain “ ‘the public interest in having free and open competition in the manufacture and sale of unpatented goods.’ ” Pepsico, Inc. v. Redmond, 54 F.3d 1262, 1268 (7th Cir. 1995), quoting 2 M. Jager, Trade Secrets Law (Rev. Ed. 1994) § IL.03. “Upon termination of the agency [relationship] . . . and in the absence of a restrictive agreement, the agent can properly compete with his principal in matters for which he had been employed. Thus, before the end of his employment, he can properly purchase a rival business and upon termination of employment immediately compete.” (Internal quotation marks omitted.) Town & Country House & Homes Service, Inc. v. Evans, supra, 150 Conn. 317. “An employee has a right to grow with his experience, and he can carry away for general use his skill and everything that he has learned at his place of employment, except trade secrets.” A.B.A., Trade Secrets: A State-by-State Survey (A. Pedowitz & R. Sikkel eds., 1997) p. 147; see 2 Restatement (Second), Agency § 396, comments (b) and (h) (1958). Because Elm City’s production methods and customer lists were not trade secrets, Federico was entitled to use them in his new business to compete with his former employer.
I fully agree with the opinions of the majority and Justice Berdon, however, as to the trial court’s well reasoned and sound conclusion that Federico violated his fiduciary duty as an accountant with respect to Elm City. The trial court did not award damages for the accountant-client confidentiality breach because the court found Elm City’s exclusive remedy to be under the Uniform Trade Secrets Act. The trial court thereby did not distinguish between the information Federico learned as Elm City’s accountant and that which he learned in his role as the operations manager. In these *106circumstances, fairness requires a new trial on the issues of liability and damages for the breach of accountant-client confidentiality. See Fazio v. Brown, 209 Conn. 450, 455, 551 A.2d 1227 (1988).
Accordingly, I dissent.

 I would conclude that whether the named defendant, Mark Federico, learned any of this information in his capacity as Elm City’s accountant is relevant only in considering a claim of breach of fiduciary duty and is of no consequence in determining if a trade secret exists.

 Elm City attempted to justify the lack of an agreement with other employees by arguing that the majority of its employees over the years have spoken English as a second language. There was no evidence, however, that the employees’ senses were impaired or that they could not speak and understand some language. I find this excuse unpersuasive.

 The only injunction that the trial court issued without the time limit was a prohibition on using any records Federico used or prepared for Elm City while he was acting as its accountant.