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AMERICAN COURTS ON TRADE SECRETS

1. NOVELTY AND UTILITY REQURIED

“[For information to qualify as a trade secret] some novelty will be required if merely because that which does not possess novelty is usually known; secrecy in context of trade secrets, thus implies at least minimal novelty.” Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974).

“[State Farm asserted trade secret status as to various information including] the names, addresses and telephone numbers of policyholders, the amounts and types of insurance … due dates of premiums and amounts thereof, … and particularly the renewal and expiration dates of policies in force. … [T]he very recital of the nature of the information acquired by the salesman and the unique interest of the company in the information, places it in the category of the trade secret…” State Farm Mutual Automobile Insurance Co. v. Dempster, 174 Cal. App. 2d 418 (1959).

2. DEGREE OF SECRECY REQUIRED

“[W]hat is a reasonable precaution … depends of a balancing of costs and benefits that will vary from case to case ….” Rockwell Graphoc Systems, Inc. v. DEV Industries, Inc., 925 F.2d 174 (7th Cir. 1991).

3. THEFT OF TRADE SECRETS

“One may use his competitor's secret process if he discovers the process by reverse engineering applied to the finished product; one may use a competitor's process if he discovers it by his own independent research; but one may not avoid these labors by taking the process from the discoverer without his permission at a time when he is taking reasonable precautions to maintain its secrecy. To obtain knowledge of a process without spending the time and money to discover it independently is improper unless the holder voluntarily discloses it or fails to take reasonable precautions to ensure its secrecy.”  E.I. DuPont deNemours & Co., Inc. v.Christopher, 431 F.2d 1012 (5th Cir. 1970).

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