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Trade Secrets Part 4: Who Can Claim Trade Secret Protections in Colorado?

Oct 09, 2014

By Reed Morris

Colorado law defines trade secrets as certain information "relating to any business or profession which is secret and of value."  In Trade Secrets Part 2, whether the trade secret information was actually "used" was discussed.  Here we consider the requirement that the information be something "relating to any business or profession..."

To enforce trade secret protections, does the claim need to come from business?  What about non-profit, individuals or trade associations?  

Whether the trade secret must relate to a "business" is another area courts in Colorado have yet to fully consider. However, outside of Colorado, courts have focused on two areas in considering who can claim trade secret protections. First, the nature of the person or entity claiming trade secret protection is examined. While the terms "business" or "profession" are not defined in Colorado's trade secret statue, the activities of volunteer organizations, trade groups, universities and other non-profits might not be disqualified based solely on a lack of "for profit" existence. The focus, instead, will be on the other elements of the protection including the secrecy and the “value.”  The nature of the protections and value as a competitive advantage offered to the trade secret claimant will likely dictate standing to protect the trade secret more than the for/non-profit status of the party.

Focusing more on the "value" of the information to the party claiming protection, the second area that courts outside of Colorado have looked is to the relationship between the information and the claiming party itself along with the claiming party’s mission, purpose or activities. For example, an advocacy or lobbying group may have "secret" information related to the position of a politician on a piece of legislation. The lobbying group may also have "secret" information on an individual politician (such as an affair) that could be viewed valuable or advantageous for the organization in leveraging their position. However, information that could be personally damaging (the affair) or simply newsworthy (the politician’s position on a bill) would likely not be found to be "business" information. The lobbying groups list of donors, on the other hand, may be protectable information, as sources of revenue for the purpose of the group carrying out its mission--sources from which competitors could extract similar financial resources if such information was not kept secret.  

 

Recap:

Part 1: What is a Trade Secret Under Colorado Law?

Part 2: A Colorado Trade Secret Owner’s Bill of Rights.

Part 3: Is Unused Business Information Protectable as a Trade Secret?

 

MLMW is a business and real estate law firm. Reed F. Morris is a Colorado litigation attorney and partner with MLMW based in Denver, Colorado. Reed regularly represents businesses and individuals in transactions and commercial disputes including trade secret and non-compete agreement litigation. He can be reached at (303) 927-0011 (direct) or by email at rmorris@mlmw-law.com


 



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