James Pooley

Even though trade secret rights are governed today almost entirely by statute (the Uniform Trade Secrets Act (UTSA) in every state except New York, and the federal Defend Trade Secrets Act [DTSA]), its operative principles are rooted in common law traditions of tort and the twin policy objectives of “maintenance of standards of commercial ethics and the encouragement of invention.” Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481 (1974). Therefore, the Restatement (of Torts, from 1939, and of Unfair Competition, from 1995) can hold sway with courts even when they are engaged in statutory interpretation…. Here is a selection of those decisions, along with other resources, which have come out during (approximately) the past year and which I believe provide helpful guideposts about important aspects of trade secret law and practice.

When May rolls around, lots of people – well, trade secret people that is – think about the Defend Trade Secrets Act of 2016 (DTSA), which for the first time in U.S. history granted original jurisdiction in federal courts for civil claims of misappropriation. The DTSA was signed into law on May 11, 2016, so it’s now eight years old. And performing pretty much as Congress intended. But this year there’s a far more consequential anniversary to celebrate. May 13 marks 50 years since the U.S. Supreme Court issued its 1974 opinion in Kewanee v. Bicron. I remember that time very well. Barely a year out of law school, I was still learning the ropes of legal practice. While walking down the hall I saw something very unusual: the senior partner sitting at his desk reading one of the “advance sheets.”

Maintaining control over trade secrets is mostly about risk management, and one dimension of risk lies in having to tell hundreds or thousands of employees to keep quiet and then depend on each of them to do so. Human nature being what it is, risk increases quite a bit when the secret is about something really big and important. And it increases even more if the secret shows that your employer is lying to the public. Indeed, you might think that kind of information is the very hardest to keep under wraps. But there seems to be a growing number of people who think it’s quite easy.

In Part I of this article, we recapped some of the most notable trade secret cases of the past year that dealt with issues such as proving secrecy and exercising reasonable efforts, as well as the publication of a key judicial resource for trade secret cases. Below, we continue with some of the top trade secret cases and subject matter the courts addressed in 2023.  

Trade secrets in the United States have a fascinating history, during which courts shaped the common law tort as a way to enforce confidential relationships. Now the legal framework is statutory, with some version of the Uniform Trade Secrets Act (UTSA) in effect in every state except New York, and with uniformity in the federal system thanks to the Defend Trade Secrets Act of 2016 (DTSA). Nevertheless, the law continues to evolve much as it did a century ago—that is, through the opinions of judges deciding individual cases on their facts. What follows is a selection of those decisions, along with other resources, which have come out during the past year and which I believe provide helpful guideposts about important aspects of trade secret law and practice.