Trade Secrets Scenarios Assignment

Trade Secrets Scenarios1. Tycoon owns an invaluable ancient Roman coin. Tycoon occasionally allows the coin to
be exhibited at museums but generally prefers to leave it sitting locked in a special vault
in his basement. The image from the face of the coin is used to advertise the wares of
Tycoons textile factory, so it is closely associated with the business by buyers. One
evening, Katz breaks into the home while Tycoon is away, busts open the vault and steals
the coin. Tycoon contends that Katz has misappropriated a trade secret.
Q: Was the invaluable coin, locked in a vault, a trade secret?
2. keeps a mailing list of all the residents in ’s area. It is well known that
the list is available for a $10 fee at the town hall. Although the list is inexpensive, it is an
indispensable part of ’s marketing operations. keeps its copy under
lock & key. It also keeps a backup copy in a secure location.
Q: Does the list have the necessary economic value to qualify for trade secret protection?
3. Soda Jerk sells a popular soft drink, Waterberry. It carefully guards the formula for
Waterberry. An employee of Soda Jerk, however, obtains the formula from the safe and
sells it to a competitor. When Soda Jerk seeks to recover from the employee and the
competitor for misappropriation, they present expert evidence that a team of skilled
chemists, working with considerable resources over several months, could have reverse-
engineered the formula. Accordingly, they argue, the formula is readily ascertainable and
not a trade secret.
Q: Is the formula readily ascertainable?
4. Dr. Warren, a cancer researcher at the University of Iowa, also works one day a week at
the University’s Cancer Care clinic. He has signed an agreement that, if he leaves the
University, he will not practice for two years within 50 miles of the University. He does
leave, and takes a job with Iowa Blood and Cancer Care, in Cedar Rapids, which is
within 50 miles. He does not take any patients with him. Studies show the area is
underserved in that practice area.
Q: Can the University get an injunction against him?
5. Equine Industries develops a new formula for nutritional supplements for horses. Equine
takes a lackadaisical approach to keeping this valuable information secret and allows
suppliers, visitors, and others free access to the information. Sure enough, many peoplethroughout history soon know the formula. Equine knows at present it cannot sue anyone
for trade secret infringement. Equine did not take the reasonable security measures
necessary for protection. But Equine decided to introduce a rigorous security program
that stringently limits access to the formula.
Q: Is the formula then a protected trade secret?
6. Lopez develops a version of the computer programming language, COBOL. Lopez takes
a number of security measures: carefully guarding the code, limiting its distribution,
avoiding disclosing information that would allow reserve engineering, and requiring
employees to sign confidentiality agreements. Parkin and Lopez agree to a joint venture
to commercialize Lopez Cobol. Lopez allows Parkin to copy Lopez Cobol onto a
personal computer and take it with him to Arizona. The business relationship falters.
When Lopez claims trade secret protection in Lopez Cobol, Parkin responds that Lopez
has failed to take reasonable security measures, because Lopez allowed Parkin to take a
copy to another state.
Q: Has Lopez failed to take reasonable security measures?
More scenarios :
5.1 It is late Friday afternoon and your top salesperson asks to talk to you. She tells you
that she is resigning to take a similar job with your major competitor. How should you
react and what should you do next? Apart from the decision as to whether to make a
counter-offer, what other decisions do you need to make? What other concerns should
you have?
5.2 Marion is expanding its market presence by opening hotels in Europe. They have
hired companies to conduct marketing studies. They have also been working with
architects and construction companies to finalize the construction plans for the
properties. Marion has made the plans known to only a few upper-level officers and all
have signed non-disclosure agreements. They were also required to sign non-compete
agreements that were in force for 18 months after they left the company and precluded
them from working with any competitor.  Unfortunately, one of the hired engineers was
found to have leaked the new plans to Hitton, one of Marion’s competitors. The
company learned that Hitton bribed the engineer to reveal the plans. On top of that,
Rebecca, one of the upper-level officers who received the information about the new
plans, has just turned in her notice and admitted that she is going to work for Hitton.
What is the first thing that you, as management should do? How can Marion protect the
information relating to its planned expansion? Can Marion prohibit Rebecca from going
to work for Hitton?
5.3 A salesperson signed a non-compete clause when he went to work for a furniture
chain. In the agreement, he confirmed that he would not work for any furniture companyfor 6 months or within 30 miles of any of the furniture chain stores. The employee left
and went to work for a competitor. The former employer then filed a lawsuit alleging
misappropriation of trade secrets and breach of contract. How do you think the court
would rule on the enforceability of the non-compete agreement?
5.4  If you are a new employee, do not have high-security clearance, and are presented
with reports containing trade secrets, would you be violating any duty owed to your
employer if you shared the information you learned with your friends over dinner?