Go to archive
Vol. 2007-09 | September, 2007

Trade Secrets; Defined, Applied

Claims and litigation in connection with business documents and information of an employer, deemed confidential, may have serious import to all parties. One recent case law decision in Ohio considered these factors and the precedents of federal case law in its findings.

{¶17} Trade secrets.are defined in R.C. 1333.61(D), which provides: “`Trade secret’ means information, including the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, pattern, compilation, program, device, method, technique, or improvement, or any business information or plans, financial information, or listing of names, addresses, or telephone numbers, that satisfies both of the following: It 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. It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

{¶18} In determining the existence of a trade secret, the trial court must consider

  • the extent to which the information is known outside the business;
  • the extent to which it is known to those inside the business, i.e., by the employees;
  • the precautions taken by the holder of the trade secret to guard the secrecy of the information;
  • the savings effected and the value to the holder in having the information withheld from competitors;
  • the amount of effort or money expended in obtaining and developing the information; and
  • the amount of time and expense it would take for others to acquire and duplicate.

Procter & Gamble, supra, citing Pyromatics, Inc. v. Petruziello (1983), 7 Ohio App.3d 131, 134-135, 454 N.E.2d 588, 592.

{¶19} The court must balance “the conflicting rights of an employer to enjoy the use of secret processes and devices which were developed through his own initiative and investment and the right of employees to earn a livelihood by utilizing their personal skill, knowledge and experience.” Valco Cincinnati, Inc. v. N & D Machining Service, Inc. (1986), 24 Ohio St.3d 41, 492 N.E.2d 814, citing GTI Corp. v. Calhoon (S.D. Ohio 1969), 309 F. Supp. 762, 768. These two interests may be balanced by distinguishing between knowledge and skill that is general in the trade and secret knowledge acquired particularly from the employer. Id. Jacono v. Invacare Corp., 2006-Ohio-1596.

“The definition of insanity is doing the same thing over and over and expecting a different result.”

Albert Einstein

AUTHOR / EDITOR: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Designer, Planner and Senior Appraiser (ASA), admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He is a Mediator, Arbitrator and Litigator with experience in Business, Construction Law, and Public Works, and with additional experience in Real Estate, Construction Attorney (Legal Project and Crisis Management), and as an Expert Witness (Forensic Architect). His office is in Cleveland, Ohio.