The definition of a trade secret essentially encompasses any information that can be used in or by a business and holds enough value and confidentiality to provide an actual or potential economic benefit over competitors.
Due to the broad range of information that can qualify as a trade secret, the answer to whether a compilation of information is a trade secret is not black and white nor a one size fits all answer. The upside of its broad definition is that it enables the nature of a trade secret to adapt as the business landscape evolves.
Generally, the Florida Uniform Trade Secret recognizes a compilation as a potential a trade secret. Under Section 688.002(4) of the Florida Statutes, a trade secret is broadly defined as:
"[I]nformation, including a formula, pattern, compilation, program, device, method, technique, or process that: (a) 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; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
(Emphasis added).
Ultimately, whether a particular compilation of information is a trade secret will depend on the facts.
Generally, if the compilation took great effort and expense, has value, is kept secret, is used within or by the business, and provides a competitive advantage, it's more likely than not a trade secret. The same holds true even where some pieces of the underlying information contained in the compilation are in the public domain or accessible through proper means. This issue was addressed in Digiport, Inc. v. Foram Development BFC, LLC, 314 So. 3d 550 (Fla. 3d DCA 2020). There, the district court explained:
“a trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation of which in unique combination, affords a competitive advantage and is a protectable secret.” Accordingly, “[e]ven if all of the information is publicly available, a unique compilation of that information, which adds value to the information, also may qualify as a trade secret.”
Id. at 553 (alteration in original) (internal citations omitted).
Therefore, even if some information elements within a compilation are publicly accessible, Florida law acknowledges that a unique combination of these elements or characteristics, which forms a distinctive process, design, or operation offering a competitive advantage and is kept confidential, may qualify as a trade secret.
For example, the court in Bridge Financial, Inc. v. J. Fischer & Associates, Inc., 310 So. 3d 45 (Fla. 4th DCA 2020) addressed how a customer list can constitute a trade secret: “[a] customer list can constitute a ‘trade secret’ where the list is acquired or compiled through the industry of the owner of the list and is not just a compilation of information commonly available to the public.” Id. at 48 (quoting E. Colonial Refuse Serv., Inc. v. Velocci, 416 So. 2d 1276, 1278 (Fla. 5th DCA 1982)). However, the customer list must be a “product of great expense and effort[] … include[] information that [i]s confidential and not available from public sources, and … distilled from larger lists of potential customers into a list of viable customers for [a] unique business.” Id. (alteration in original and added) (quoting Zodiac Records Inc. v. Choice Env’t Servs., 112 So. 3d 587, 590 (Fla. 4th DCA 2013)).
With respect to the secrecy requirement, it need not be absolute. In other words, the absolute best security measures available is not the legal standard when evaluating secrecy. Rather, the presence of reasonable security measures to safeguard the confidentiality of the compilation will suffice.
Reasonable security measures include, but are not limited to:
securing executed confidentiality and nondisclosure agreements that adequately address the confidential nature of the compilation and the associated rights, duties, obligations, and violations for breach from internal and external parties.
requiring those with access to attest to their understanding that the compilation and underlying information must be closely guarded.
limiting access only to those with a need-to-know.
storing records on password protected and encrypted folders and servers.
including clear duties of confidentiality and disciplinary actions for the unauthorized use or disclosure in an employee handbook.
Closing Remarks
A compilation of information may qualify for trade secret protection in Florida even where pieces of the underlying information are in the public domain or readily accessible through legitimate means. As trade secret protection is a complex legal area, the specific facts and security measures necessary to establish a compilation as a trade secret will vary.
The information provided in this post is for general informational purposes only and is not intended and should not be construed as legal advice or opinion for any individual matter. You should consult your own attorney for any legal advice you may require.
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