Many small firms in Minnesota have information that they want to shield from the prying eyes of their competitors. Minnesota has two categories of protectable information: trade secrets and confidential information. Understanding the difference can be the key to protecting vital company information.
The Uniform Trade Secrets Act
Minnesota has enacted the Uniform Trade Secrets Act which both defines trade secrets and provides legal protection to information that fits within the definition. The statute defines a “trade secret” as information that
“derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. . . .”
The two essential concepts are the absence of public awareness of the information and the fact that disclosure of the information may afford economic value to others. The mere declaration of information as “secret” will not protect it (more on this below). Equally important is the unavailability of information from other sources. If the information is available, say, on the Internet, it cannot be held to satisfy the statutory definition of “trade secret.”
The owner of information that is a trade secret under the statute can seek an injunction to prohibit its use by a non-owner. The owner of the information can also sue for damages caused by unauthorized disclosure of the secret information.
The provisions of the Uniform Trade Secret Act are very broad, but what about information that may not fit the statutory definition but which the owner wishes to keep secret?
Many employment contracts contain terms that define a company’s confidential information and prohibit employees from disclosing the information. Using an employment contract or other agreement to protect confidential information may give broader protection than the Trade Secrets Act, but the limits in the agreement must be reasonable.
Perhaps the best solution is a “belt and suspenders” clause in an employment agreement in which the employee agrees to abide by the Uniform Trade Secrets Act and also agrees not to disclose information defined as “secret” in the agreement. Anyone who has concerns about protecting a trade secret or confidential information may wish to consult an experienced intellectual property attorney for an evaluation of the information at issue and an opinion on how best to protect it.