Trade secret litigation challenges First Amendment speech rights

Trade secrets gain a competitive edge over the competition.  Companies will guard that advantage under lock and key and make employees sign non-disclosure agreements (NDA’s).  But what happens when a trade secret appears in a newspaper, newsletter or website? Misappropriation In most definitions of the law, misappropriation is defined as gaining trade secret information by improper means, such as theft, bribery, misrepresentation, breach of duty, and then disclosing or using the information.   Achieving knowledge about trade secret information through independent means or reverse engineering is not an “improper means”. Case Example This case, State ex. rel. Sports Mgmt. News, Inc. v. Nachtigal, 921 P.2d 1304 (Or. 1996) is an example of how misappropriation was not proven, and at the same time, restored first amendment rights to a newsletter publisher. Adidas complained to the circuit court that SMNI had printed in their weekly trade newsletter entitled Sporting Goods Intelligence (SGI) their trade secrets. They petitioned to ask the court to mandate that Sports Management News, Inc. seek the approval of the court anytime they wanted to publish anything that may be an “alleged trade secret” regarding Adidas.   The Washington County Circuit Court granted Adidas’ petition, but the Supreme Court of Oregon overturned it after concluding that the publication of a trade secret by a newsletter is protected speech — as long as the information was not misappropriated or obtained through improper means. Although Adidas proved that the information came from a booklet that was a trade secret. The information that SMNI printed was information from that booklet, but they could not prove that SMNI misappropriated the information. The Supreme Court’s findings were based on this evidence, or lack of, presented to the circuit court: “The failure of its internal investigations to locate the source of any disclosure of the booklet or its contents, and that it appeared that SMNI’s published report derived from SMNI’s possession of the booklet. Adidas adduced no additional facts to establish any of the statutorily defined aspects of SMNI’s alleged ‘misappropriation.’ SMNI did not disclose whether it possessed the booklet or, if it had it, how it got it.” It was concluded that trade secrets can be freely published if the publisher received the information lawfully.  The post Trade secret litigation challenges First Amendment speech rights first appeared on Chenoweth Law Group, P.C..