The Sedona Conference Commentary on the Governance and Management of Trade Secrets

This Commentary was written from both legal and business perspectives as a useful reference for the design and implementation of trade secret governance and protection programs in corporate environments. It can also provide insight to litigators and judges about the practical ways companies approach the “reasonable efforts” requirement in trade secret law. The central message is that programs to manage trade secrets, like other business processes, should align with business objectives in the context of the needs of the specific business. Ideally, trade secret management should be contextual and strategic, and not just a collection of “boilerplate” forms and protocols that may bear little relationship to the actual trade secrets and risk environment of a particular company.

While trade secret management demands strategic business thinking, it also has a legal dimension. The existence of a trade secret depends in part on whether the company has exercised “reasonable efforts” (or “reasonable measures”) directed at maintaining its secrecy. This standard corresponds to the relevant circumstances of each enterprise, so that there can be no “one size fits all.” In effect it suggests that the judge or jury apply the same kind of analysis; namely, an assessment of the value of, and risks to, specific trade secrets in the context of the company’s particular business and resources. The authors hope that this paper will help management formulate a proactive, tailored, and practical approach to managing trade secret assets that will address both business and legal requirements.

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