USA Law and Practice Contributed by: Claudia Ray, Joseph Loy, Brandon R. Weber and Andrew (Keum Yong) Lee, Kirkland & Ellis LLP
• customer lists (Fireworks Spectacular, Inc v Premier Pyrotechnics, Inc, 86 F Supp 2d 1102, 1106 (D. Kan. 2000)). Examples of a trade secret under the common law, which is still the applicable law in New York and continues to be persuasive precedent in UTSA states, include “ any formula, pattern, device or compilation of information which is used in one’s business ”, such as pricing-relat - ed information, customer lists or source code (Restatement of Torts Section 757, Comment b; Laro Maint Corp v Culkin, 700 NYS 2d 490, 492 (1999); E Bus Sys, Inc v Specialty Bus Sols, LLC, 739 NYS 2d 177, 179 (2002); MSCI Inc v Jacob, 992 NYS 2d 224, 225 (2014)). 1.4 Elements of Trade Secrt Protection DTSA and UTSA To prevail on a claim of trade secret misappro - priation under the DTSA and state trade secret laws, a claimant must prove the following three elements: • that the claimant owns a trade secret (see the discussion in the following on ownership of trade secrets); • that the trade secret was misappropriated by the defendant; and • that the claimant was damaged by the defendant’s misappropriation. With respect to the first element, a claimant has to prove the existence of a trade secret by show - ing the following: • that the owner has taken reasonable measures to maintain the secrecy of the trade secret; and • that the trade secret derives actual or potential economic value from not being generally known or readily ascertainable through proper means to
another who can obtain economic value from the information’s use or disclosure.
Additionally, some state trade secret laws explic - itly state that the owner must have taken reason- able measures under the circumstances to main - tain the secrecy of the trade secret. For example, California’s version of the UTSA requires that the trade secret “ [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy ” (Alta Devices, Inc v LG Electronics Inc, 343 F Supp 3d 868, 877 (N.D. Cal. 2018) (quoting Cal. Civ. Code Section 3426.1(d))). New York In New York, there are six factors that are gen - erally considered when determining whether a trade secret exists (Ashland Mgmt. Inc v Janien, 82 N.Y.2d 395, 407, 624 N.E.2d 1007, 1013 (1993)): • the extent to which the information is known outside of an individual business; • the extent to which it is known by employees and others involved in their business; • the extent of measures taken to guard the secrecy of the information; • the value of the information to the holder and to their competitors; • the amount of effort or money expended in divulging the information; and • the ease or difficulty with which the information could be properly acquired or duplicated by others. Some courts in UTSA states continue to con - sider these six common law factors in determin - ing whether a trade secret exists, despite having adopted a variation of the UTSA. To prevail on a claim for trade secret misappro - priation in New York, a claimant must prove that (i) they own a trade secret, and (ii) the defend -
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