Many agreements contain overbroad definitions of what is a trade secret, and require that you agree not to divulge or misuse those claimed trade secrets. Courts reviewing such broad clauses may refuse to enforce the trade secret portion of the agreements because the definition of trade secret in the agreement is too broad.
In Perlan Therapeutics, Inc. v. Superior Court, 178 Cal.App.4th 1333, 101 Cal.Rptr.3d 211, (2009), review Denied Feb. 18, 2010, an employer brought an action against former employees for misappropriation of trade secrets. The trial court ruled that the employer failed to identify the allegedly misappropriated secrets with sufficient particularity. The employer appealed the trial court’s dismissal. The appellate court denied the appeal, holding that:
(1) The employer's identification of trade secrets was insufficient, and
(2) The trial court did not improperly base its rejection of trade secret statement on employer's failure to prove its trade secrets were not generally known.
NOTE: If you sign an agreement which addresses an obligation to keep information confidential as a trade secret, the language must be narrowly tailored and the information sought to be protected must really be confidential and not public information in order to be enforceable.
