Last year, the Gonzaga Law Review published an exhaustive study of federal court trade secret litigation. This week, it published a companion study of state appellate court decisions involving trade secrets during the period between 1995 and 2009.

Among the state study’s more interesting findings are these:

  • “In the vast majority of trade secret cases, the alleged misappropriator was someone the trade secret owner knew. Specifically, the alleged misappropriator was an employee or a business partner 93% of the time in this state study.”
  • “both the state and federal studies confirm that confidentiality agreements with employees and business partners are the most important factors” when courts decide whether a trade secret owner took reasonable measures to protect the purported trade secrets.
  • “Of the varied subject matter that can qualify as a trade secret, two categories comprise the vast majority (94%) of trade secrets litigated in state courts: internal business trade secrets (i.e., customer lists and internal business information) and technical trade secrets (i.e., formulas, technical information, and software or computer programs). Internal business trade secrets were litigated in 70% of state cases, and technical trade secrets were litigated in 36%.”
  • “About half of all state appellate cases are heard in only five states: California (16%), Texas (11%), Ohio (10%), New York (6%), and Georgia (6%).” 
  • “State courts appear to be a tougher venue for trade secret owners who are suing business partners than for those suing employees – trade secret owners won 42% of the time on appeal when the owner sued an employee, but only 34% when the owner sued a business partner.”

The study is well worth reading for anyone who follows this area of the law.

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