Here at the Law Office of Vincent Miletti, Esq. and the home of the #UnusuallyMotivated movement, we take pride as a resilient and dependable legal services firm, providing such services in both a traditional and online, web-based environment. With mastered specialization in areas such as Employment and Labor Law, Intellectual Property (IP) (trademark, copyright, patent), Entertainment Law, and e-Commerce (Supply Chain, Distribution, Fulfillment, Standard Legal & Regulatory), we provide a range of legal services including, but not limited to traditional legal representation (litigation, mediation, arbitration, opinion letters and advisory), non-litigated business legal representation and legal counsel, and unique, online legal services such as smart forms, mobile training, legal marketing and development.

Still, we, here at Miletti Law®, feel obligated to enlighten, educate, and create awareness, free of charge, about how these issues and many others affect our unusually motivated® readers and/or their businesses. Accordingly, to achieve this goal, we have committed ourselves to creating authoritative, trustworthy & distinctive content. Usually, this content is featured as videos posted on our YouTube Channel and blogs that are published on our website WWW.MILETTILAW.COM. With that, the ball is in your court and you have an effortless obligation to subscribe to the channel and sign up for the Newsletter on the website, which encompasses the best way to ensure that you stay in the loop and feel the positive impact of the knowledge bombs that we drop here!

As the authoritative force in Employment Law, it only seemed right to introduce one of the many upcoming series where we remain persistent in introducing a variety of topics, which will look to not only educate but also deliver in a sense that only Miletti Law® can. In this regard, this blog is Part II of our fresh and new series on “Cybersecurity Measures to Protect Employers.” In Part I of this series, we set the context by providing you with the definition and overview of cybersecurity.

Statutory Definitions & Types of Information Comprising Trade Secrets

What Information Comprises Trade Secrets?

Before implementing protective measures, an employer must identify the kinds of trade secrets warranting protection. Examples of trade secrets that could be stored electronically and subject to cybersecurity measures include, but are not limited to:

  • Employee and/or customer (or potential customer) lists.
  • Computer codes, recipes, formulae, and design blueprints.
  • Business and marketing plans.
  • Spreadsheets and databases that contain logistical statistics and data.
  • Supply and customer service requirements or preferences.
  • Profits, billing, pricing, and cost methodology and information.
  • Employee contracts or additional information on benefits, compensation, and wages.

Depending on the value and nature of trade secrets requiring protection, protective measures may vary. Every employer has an individual obligation to determine and install the level and nature of cybersecurity measures necessary to protect specific trade secrets and other proprietary information. For instance, a range of cybersecurity measures could be adopted in protecting electronically stored trade secrets.

Statutory Definitions of the term “Trade Secret.”

As defined under the Defend Trade Secrets Act of 2016 (DTSA) or most state Uniform Trade Secret Acts (UTSA) (including additional local trade secret statutes) and pursuant to 18 USC § 1836, an employer must first demonstrate that a misappropriated property was a “trade secret” while alleging trade secret misappropriation. Accordingly, the term “trade secret” is defined as follows under different statutes:

Definition under the DTSA

Pursuant to 18 USC § 1839(3), the term “trade secret,” under the DTSA, implies all types and forms of engineering, economic, technical, scientific, business, or financial information, including codes, programs, procedures, processes, techniques, methods, prototypes, designs, formulas, program devices, compilations, plans, or patterns, whether or how memorialized, compiled, or stored in written form, photographically, graphically, electronically, or physically, and whether tangible or intangible if –

  1. Reasonable measures have been taken by the owner thereof to ensure the secrecy of such information –and-
  2. The information derives potential or actual independent economic value from not being readily ascertainable through proper means by and not being generally known to another individual who can obtain economic value from the use or disclosure of such information.

Definition under UTSA § 1.4.

Pursuant to Unif. Trade Secrets Act § 1(4), “trade secret” is defined similarly as:

Information, including a process, technique, method, device, program, compilation, pattern, or formula, that:

  1. Derives potential or actual independent economic value from not being readily ascertainable through proper means by and not being generally known to another individual who can obtain economic value from the use or disclosure of such information.
  2. It is the subject of reasonable efforts under the circumstances to ensure its secrecy is maintained.

Concisely, for such information to qualify as a trade secret, employers are obligated under both the DTSA and UTSA to take “reasonable measures” or make “reasonable efforts” to ensure the safety and secrecy of such confidential information. Technically, the type of trade secret being protected may determine what constitutes a reasonable measure. Essentially, a combination of security measures usually makes up reasonable efforts. However, it is crucial to note that there is a carve-out under the DTSA, which immunizes an individual’s disclosure of a trade secret from liability under both state and federal trade secret law:

  1. Made under seal in a court filing-or-
  2. To an attorney or the government to investigate or report a suspected law violation. Under this law, employers are required to either cross-reference a policy document or provide notice of this immunity in their confidentiality agreements explaining its reporting policy for suspected violations of law.

In Part III of this new series, we shall move the discussion forward and provide you with a hands-on guide on “How to Reinforce a Cybersecurity Program: Key Preliminary Steps!

In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!

Always rising above the bar,

Isaac T.,

Legal Writer & Author.