Is Knowledge Now Infringing On Trade Secret?

Is Knowledge Now Infringing On Trade Secret?

On February 6th, 2008, the Ohio Supreme Court in Al Minor & Assoc. v. Martin,[1] held that memorized information can fall within the scope of trade secrets in accordance to the Uniform Trade Secrets Act (UTSA). The court’s desire to discard the written-memorized information distinction was principally to align the UTSA with like acts from other states that already recognize memorized information as a possible basis for trade secret violation. It was also clear however, that the court was trying to prevent the unethical person from memorizing parts of trade essential information with the intention of establishing a competing business or selling said information to competitors.

The Al Minor decision has generated many questions however, the most important being: what does not constitute a violation of trade secret? At what point are the experiences, knowledge and memories acquired by a person in the course of his employment, no longer trade secret, but rather the right of the individual? The UTSA provides that information that has actual or potential independent economic value is trade secret if three conditions are met: that the information (a) not be generally known, (b) not be readily ascertainable and that there have been (c) reasonable efforts to maintain its secrecy. These three conditions could have been of assistance had the court not flatly refused to consider the argument that, due to the presence of public information which was easily attainable on the internet, there was no trade secret infringement in this case. Consequently, it is hard to see what memorized information would not fall under the UTSA, rendering the court’s assurances that the UTSA would not apply to memorized information that was not trade secret, impotent and without substance.

The court then went on to apply the test developed in Plain Dealer v. Ohio Dept. of Ins.[2], to determine the presence of a trade secret infringement. In applying said factors in lieu of crafting a new test designed for memorized information, the court failed to recognize the subtleties that arise in matters of memories. First, the content of memories differs greatly than that in written form. A stolen report is clear and discernable, but the information in a portfolio recommendation generated and now in the memory of the analyst, walks a much finer line.  Where do the analytical procedures developed or learned from the company fit? What about the professional networking relationships? There also lies the question of the type of memory that triggers trade secret violation. Is it the short term conscious working memory, the long term memory, or both? Finally, in light of the Francis Day decision which acknowledged the existence of subconscious copyright infringements, can this principle be extended to find subconscious trade secret violations?

The consequence of Al Minor decision is there will inevitably be litigation over these unanswered questions in the future, as both employers and individuals jockey to protect an unclear and ill defined category of memorized trade secret rights.

[1] Al Minor & Assoc., Inc. v. Martin, 117 Ohio St.3d 58, 2008-Ohio-292.

[2] Plain Dealer v. Ohio Dept. of Ins. (1997), 80 Ohio St.3d 513, 524, 687 N.E.2d 661.