Trade Secrets Part 5: Do You Own a Trade Secret? Sep 13, 2015
The issue of whether something is a trade secret under Colorado law is a “question of fact” meaning that the decision is one generally found, on a case by case basis, and not subject to a single bright line test. The often cited list of factors applied by judges or juries in deciding whether, or not, a trade secret exists are:
(1) the extent to which the information is known outside the business;
(2) the extent to which it is known to those inside the business, i.e., by the employees;
(3) the precautions taken by the holder of the trade secret to guard the secrecy of the information;
(4) the savings effected and the value to the holder in having the information as against competitors;
(5) the amount of effort or money expended in obtaining and developing the information; and
(6) the amount of time and expense it would take for others to acquire and duplicate the information.
Colorado Supply Co. v. Stewart, 797 P.2d 1303, 1306 (Colo. App. 1990)
Put differently, a person claiming trade secret protection or seeking relief from a trial court in the form of damages or an injunction must first answer the following question in the affirmative: Do you even own a trade secret in the first place?
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 email@example.com.