The Uniform Trade Secrets Act requires that a trade secret be subject to “reasonable efforts under the circumstances to maintain its secrecy.” The Defend Trade Secrets Act similarly requires that the owner have taken “reasonable measures to keep such information secret.” But what is reasonable and what isn’t? And how do you prove one proposition or the other? We will examine here the role of the expert in assisting the trier of fact to reach a conclusion.
Rule 702 of the Federal Rules of Evidence permits a court to accept expert testimony when the proponent has demonstrate each of four requirements: (a) the expert’s specialized knowledge will “help the trier of fact” determine an issue; (b) the testimony is based on sufficient facts; (c) the opinion is grounded on “reliable principles and methods” which (d) have been “reliably applied” to the facts of the case.
Use of experts is common in trade secret litigation. Where the subject matter of the claimed secrets is highly technical, retained specialists will be presented by each side to help explain the evidence in a way that the judge or jury can understand its nature and whether it is likely to have been misappropriated by the defendant. And in almost every case, damage experts will be called to provide an opinion of the amount that should be paid by the defendant in case misappropriation is found.
But despite the universal requirement that a plaintiff prove “reasonable efforts,” there have been only a few opinions reporting on how that element is established or disproved through experts. Instead, most of the case law seems to come from attempts to test the issue by summary judgment, the majority of which fail because the courts see it as a fact issue for the jury.
Based on my experience and review of reported cases, the “reasonable efforts” issue appears not to have been seriously challenged in most disputes. In part this may be the result of a sensible assessment in those cases that the facts do not suggest that the plaintiff was sufficiently careless. Alternatively, the defendant’s misappropriation may have been so obvious that asserting lack of reasonable efforts might be seen as insulting to the jury’s sense of morality.