Trade secrets are often a company's most valuable assets. For Florida businesses, understanding how to identify and protect these valuable assets is essential for maintaining a competitive edge.
This post discusses what qualifies as a trade secret under Florida law and outlines practical steps to safeguard these high-value business assets.
What is a Trade Secret Under Florida Law?
The Florida Uniform Trade Secrets Act (FUTSA) defines a trade secret as information that meets the following two requirements:
It derives independent economic value from not being generally known or readily ascertainable by others who could obtain economic value from its disclosure or use, and
It is the subject of reasonable measures to maintain its secrecy.
Fla. Stat. § 688.002(4)
Trade secrets can encompass various forms of proprietary business information, including:
Methods
Processes
Formulas
Patterns
Programs
Devices
Techniques
Trade secrets can also include:
Customer lists developed through "considerable effort, knowledge, time and expense.” Unistar Corp. v. Child, 415 So.2d 733, 734 (Fla. 3rd DCA 1982))
Strategic marketing plans and pricing information. Vas Aero Services, LLC v. Arroyo, 860 F. Supp. 2d 1349, 1359 (S.D. Fla. 2012))
What Does "Independent Economic Value" Mean?
The requirement of "independent economic value" means the information derives its commercial worth from the owner's investment of time and resources in creating the information, efforts to maintain confidentiality, and the information's unavailability through legitimate means. Information that is readily obtainable through public records or market research generally does not qualify for trade secret protection. American Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407, 1410 (11th Cir.1998); Templeton v. Creative Loafing Tampa, Inc., 552 So. 2d 288, 289 (Fla. 2d DCA 1989)).
What Are Reasonable Efforts to Protect Trade Secret Information?
Florida courts have recognized various types of security measures as satisfying the "reasonable measures" requirement, including:
Restricting access to specific employees and licensed third parties
Requiring confidentiality agreements
Implementing role-based access controls
Establishing restrictive computer policies
Liberty American Ins. v. WestPoint Underwriters, 199 F. Supp. 2d 1271,1286 (M.D. Fla. 2001); Marlite, Inc. v. Eckenrod, No. 09-22607, 2011 WL 39130 at *7 (S.D. Fla. Jan. 5, 2011) aff'd sub nom. Marlite, Inc. v. Am. Canas, 453 Fed.Appx. 938 (11th Cir. 2012)).
The level of security measures should be proportional to the value of the trade secret. In other words, the more valuable the trade secret is, the more robust and comprehensive the security measures should be.
Safeguarding Trade Secrets
Successfully safeguarding trade secrets requires a methodical, multi-layered approach that addresses both legal requirements and practical business needs. The foundation begins with properly identifying and documenting your trade secrets.
A comprehensive protection strategy should encompass these key areas:
Administrative Controls
Administrative controls are the policies, procedures, and organizational practices that govern how employees and third parties interact with trade secret information. Some key administrative controls include:
Access protocols that restrict trade secret information strictly to employees with a documented business need
Robust confidentiality agreements that specifically identify protected information and survive employment termination
Detailed onboarding and off boarding procedures, including exit interviews that remind departing employees of their continuing confidentiality obligations
Clear marking and classification systems for confidential documents and data
Technical Security Measures
These encompass the technological tools and systems used to protect trade secrets in digital format. Examples of technical security measures include:
Industry-standard encryption for both data at rest and in transit
Multi-factor authentication and role-based access controls
Monitor and log all access to trade secret information
Secure protocols for remote access and mobile device management
Regular backup and disaster recovery planning for trade secret information
Physical Security Measures
These are the tangible barriers and controls that protect trade secrets from physical access or viewing. Examples of physical security measures include:
Appropriate security systems including cameras and access card readers
Visitor logs and escort policies
Physical documents in locked storage with controlled key/combination access
Clean desk policies and document destruction protocols
Closing Remarks
Success in trade secret protection requires a holistic understanding of what qualifies as a trade secret and an organizational culture that values intellectual property protection. By properly identifying true trade secrets, implementing appropriate protections, and regularly evaluating the effectiveness of protective measures, your company can better preserve its competitive advantage and position itself to seek legal remedies if misappropriation occurs.
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.
If you would like to explore how Venus Caruso can assist you, contact Venus today using the website’s contact form or by email to venus@carusolawoffice.com.
