Common to trade secret protection statutes is the requirement that companies make reasonable efforts under the circumstances to protect information considered a trade secret. The definition of a trade secret relied on by the recently enacted Defend Trade Secrets Act of 2016 (DTSA) is no different. Under the federal definition, information is a trade secret if “the owner thereof has taken reasonable efforts to keep such information secret.” It should be expected that a defendant facing a claim of misappropriation of trade secrets may argue the steps a trade secret owner has taken to protect its trade secrets are not reasonable.

The DTSA should provide companies with an incentive to evaluate existing trade secret protection programs, or establish one if no program exists. Trade secret protection programs should use a variety of methods to segregate and prevent unfettered access to sensitive information. One option is to implement a compartmentalization, or need to know, policy for information of this type. Such a policy may reduce the risk of unauthorized access to sensitive information. An implemented policy may also support a claim in litigation that the asserted trade secret is a trade secret. This article discusses several considerations a company should address when implementing a need-to-know information protection policy.

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