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The Economic Value of Trade Secrets

  • By: Robert Klein

In order to prevail on a claim that someone stole or misappropriated (as used in legal jargon) your trade secret, you not only have to prove the trade secret was subject to efforts to keep it secret, you also have to show it had economic value to people other than yourself.

A recent case called Yield Dynamics held that if the defendant being sued for taking another’s trade secret, can demonstrate that the information that is the subject of the trade secret lacks value to anyone beyond the parties themselves the case will be thrown out. Essentially the party claiming the trade secret must show the secret information gave the owner a competitive advantage.

In Yield Dynamic the trade secret was a computer software source code. Yield Dynamic failed to show the source code could have been exploited by the defendant to the disadvantage of Yield Dynamic. If the information taken lacks value to anyone beyond the parties themselves and provides no competitive advantage the trade secret claim will fail.

Robert Klein

About the Author Attorney Robert Klein is a former CPA and known for
finding creative solutions to complex business lawsuits.