California Court Adopts Broad Definition Of What Is A Trade Secret

In the recent decision in Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., the California Court of Appeal explored the outer limits of what constitutes a protectable trade secret, and found that trade secrets (at least in California) are broadly defined.

Among the issues in Altavion was to what extent ideas — as opposed to specific products, formulas, computer codes, etc. – can be protected as trade secrets. The Court of Appeal held that so long as it is protected from public disclosure (i.e. “secret”) and has independent economic value, even an idea can qualify as a trade secret. Consequently, the Altavion case shows that ideas, concepts and designs can be protectable trade secrets even if not general and not reduced to specific practice.

In Altavion, the Court of Appeal also rejected the idea that a generalized idea and/or invention could not be protected under trade secret law if it could be protected by a patent, noting that there is substantial overlap between trade secrets and patents and an idea, so long as it is kept secret, even if the idea also could be protected by a patent as well. Indeed, the court noted that more and more businesses rely on trade secret law to protect their intellectual property given the growing number of patents that are invalidated by the courts.

Finally, in Altavion, the Court of Appeal explained that the mere fact that some elements of a claimed trade secret were in the public domain will not necessarily defeat a trade secret claim. The court rejected an analysis of the individual elements of a claimed trade secret (such as often is done in copyright infringement litigation) and found instead that the combination of matters in the public domain still can qualify as a trade secret so long as the combination was secret and had independent economic value.

The Altavion case obviously is a must read for anyone interested in trade secret law.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: