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Tilting the Scales Business Issues with a Legal Slant

Publishing Trade Secrets

Posted in Employment & Labor, Social Media & The Internet

Popeye Church, a budding chef, wanted to revive “country cooking,” with fried chicken as his signature dish. However after many tries, he failed to create a great recipe and became obsessed with cracking the code of the best-kept culinary secret in the fried chicken industry – the inimitable 11 herbs and spices of Pennsylvania Fried Chicken. Popeye tried bribing PFC employees for the receipt and even hired a chemist to unlock the secret ingredients. At wit’s end, Popeye went undercover as a janitor of PFC. Late one night he discovered the secret safe open and snatched a copy of the recipe. However, Popeye’s plans for “country cooking” stardom ran afoul when his investors would not fund his restaurant since his signature dish was stolen from a competitor. Frustrated, Popeye explained to a friend how he got the recipe. Eager to make some money, his friend offered to publish the recipe in his upcoming book, “Original Clone Recipes of America’s Favorite Foods.” Does PFC have a claim against Popeye or his friend who published the book?

“Trade Secrets.” In Texas and most states, if the owner of a “trade secret,” takes reasonable steps to preserve its secrecy, and a third party uses or discloses the trade secret (i) in violation of a confidential or contractual relationship with the owner, (ii) after acquiring it by improper means, or (iii) after acquiring it with notice that the disclosure was improper, then the owner can protect his “trade secret” by injunction and for damages suffered. Popeye, like any other ambitious cook, was free to hire a chemist and to experiment at will to duplicate the secret herbs and spices. When Popeye became an employee of PFC, his search for the recipe crossed the line. PFC has a legal claim against Popeye and his friend.

Wiki Leaks. The parallels between government “trade” secrets released by Julian Assange and his company WikiLeaks, with PFC’s trade secrets are many. In both, their protected information is confidential or “secret;” the “trade secret” owner took reasonable steps to preserve secrecy, and a third party disclosed the secrets. Popeye wanted “country cooking” fame and money; probable leaky source Pfc. Bradley Manning undoubtedly sought something other than money. Both are answerable to their boss. Popeye faces a civil court; Manning may well be facing the Uniform Code of Military Justice. Assange probably violated the Espionage Act of 1917. [See http://lrmlawblog.com/emedialaw/wikileaks-disclosure-of-diplomatic-cables-is-that-legal/] The readers, in both cases, are free to read and use the information as they please. Once published to the world, the “secrecy” is gone.

Tilting the Scales in Your Favor. If you have a trade secret, identify it specifically, in writing, with a confidentiality, nondisclosure or other similar agreement. Beware of using a “boilerplate” form off the internet because only certain kinds of information and subject matter qualify for protection. Overly broad or insufficient language describing the proprietary information can make the agreement unenforceable.

Three may keep a secret, if two of them are dead. Benjamin Franklin (1706-1790).