Trade Secrets Claim Rejected Where Company Did Not Protect Trade Secrets

FAIL SAFE LLC v. SMITH CORPORATION, No. 11–1354., March 29, 2012 - US 7th Circuit | FindLaw:

The Seventh Circuit affirmed the district court's rejection by summary judgment of certain trade secret claims.  The district court found that the plaintiff had failed to take reasonable measures to protect its trade secrets and had, in fact, voluntarily disclosed those secrets to the Defendant corporation.  The Seventh Circuit affirmed.

The Seventh Circuit summarized its decision as follows:

"This case is about whether a plaintiff can sustain a trade secret or unjust enrichment claim when that plaintiff fails to take any protective measures to safeguard its proprietary information. Business relationships do not always develop under formulaic circumstances. But where one company fails to take any protective steps to shield its proprietary information, it cannot then expect the law to protect it when the relationship sours. For this reason, we affirm."


Comment: these are words to live by for small businesses trying to protect trade secrets.


Edward X. Clinton, Jr.

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