Are Insurance Filings Exempt as Trade Secrets?

(c) sasha stim-fogel

Dear Rich: My question is, out of the 43 states that have adopted the Uniform Trade Secrets Act, which of those states exempt trade secrets from becoming public information in an insurance filing (insurance filing)? I need to know this for my job and I need to find out what language each state uses to exempt the insurance filing. For example, Alaska has adopted the UTSA (Alaska, Stat. Secs. 45.50.910 et seq.). So now I need to find out if Alaska exempts trade secrets from becoming public information. Our apologies, but 47 (not 43) states and the District of Columbia have adopted some version of the Uniform Trade Secrets Act (UTSA). We recently updated our site to include more current adoptees. (The remaining UTSA holdouts are New York, Massachusetts, and Texas).

Where in the world is ... We couldn't tell you which states have exempted insurance filings as trade secrets because that information -- as  far as we can tell -- is not provided in each state's UTSA. For example, Alaska's trade secret law makes no mention of Alaska's trade secret exemption for insurance filings (scroll down to Sec. 21.39.035). This article can start you on the right course but you may want to suggest that your employer subscribe to a service from a company like this. And of course, as you may know all this may be changing as the trend may be heading away from secrecy in insurance filings.

Claiming Glazing Technique as Trade Secret

Dear Rich: I have a crafts business and I've developed some ceramic glazing techniques that are pretty unique. I took on an assistant in 2008 and trained her to do these techniques. I've always told her not to tell anyone about the process or materials used in the glazing and as far as I know she never has. The trouble is that she has gone out on her own and is now competing against me at local fairs and stores using some of these glazing techniques. Is there anything I can do? Maybe. If you can claim that the techniques are your trade secrets, you may be able to prevent your former assistant from using them. As we explain here, you need to prove that the process is not generally known within your industry and that you've taken reasonable steps to keep it confidential. Here is an article detailing the steps you should take if a secret is stolen (and you can follow up with a cease and desist letter). You don't have to have a nondisclosure agreement (NDA) with your former assistant because most states have laws in place that prevent trade secret misappropriation (theft).  It may also make a difference if the assistant is characterized as an employee or as a contractor. By the way, in the future, you might want to use an NDA and at this site we've provided a basic one (click on the section titles for explanations) as well as a selection of specialty NDAs. Also, if the assistant has copied any of your ceramic imagery or copyrightable designs, you may be able to pursue the assistant under copyright law. Check out our crafts law book for more details.

Must Ex-Employee Disclose Post-Employment Inventions?

Dear Rich: Can an employer in California require an ex-employee to disclose all inventions created after the employment has ended. I've been asked to sign an agreement that requires me to disclose all inventions I create even for a year after I leave the company? The Dear Rich Staff is always fascinated by post-termination provisions. Yes, they are usually insidious, over-reaching, poorly drafted, and a desperate attempt to assert control by the legal-capitalist puppet-masters. But there's also an element of hopefulness to them. After all the employer sees some kind of future for you. So, when you get that call from the HR department and you start to see pink, remember that the employer who is about to end your career also has enough faith in you to pursue you for months after you've cleaned out your desk.
Right, you had a question. We can't say for sure whether your post-termination clause is enforceable but we can give you some background. California's Labor Code Secs. 2870-72 sets the rules for some invention disclosures. That law prohibits the employer from claiming rights to inventions you create on your own time with your own supplies and equipment. It also permits an employer to require employee disclosures of all inventions created during the course of employment. Unfortunately, it doesn't say anything about disclosures made after employment is terminated.
Two cases that shed a little light. In a 2006 case, STMicroelectronics v. Harari, a federal court indicated that California's disclosure requirements could be construed broadly for purposes of protecting an employer's trade secrets (although it didn't specifically address post-termination provisions.) In Yield Dynamics v. Tea Systems, a California Court of Appeal looked at a post-termination disclosure and ruled that an ex-employee had honored it. Again, the court didn't specifically address whether such clauses are always enforceable.
California policy. We think that a California court will consider it unenforceable if the provision is primarily being used as a means of preventing you from competing (that is, like a noncompetition clause). If a court considers it as a legitimate attempt by the employer to preserve company trade secrets, it is more likely to be enforced. The factors that are likely to tip the decision are the length of the provision (generally the longer, the less enforceable), the industry, or category of technology or invention involved (in some industries such as high-tech, trade secrets are short-lived), and the relative behavior of the parties (for example, it would be less enforceable if the employer customarily uses this provision to hassle ex-employees). We also think this is something you should make your new employer aware of as you want to avoid disclosing any newly acquired trade secrets. It's also the kind of thing you may want to consider hiring an attorney for an opinion.

Does Filing For Patent End NDA?

Dear Rich: If company A and company B have both signed a legal nondisclosure agreement (NDA) and then company A applies for a patent on the business plan covered in the NDA, does that make the information public and therefore make the NDA null and void? Information in a patent application becomes public when the USPTO publishes an application 18 months after filing. If the applicant does not plan on filing in foreign countries, the applicant can opt out of the 18-month publication program. If the applicant has opted out, the application will only become public if the application issues (or the applicant changes position on foreign filing). (We've discussed that previously, here.)
What happens after publication. Whenever the information is published, that information can no longer be protected as a trade secret and will not be subject to an NDA. That doesn't necessarily make your NDA "null and void." If other nonpublished information has been included as part of the NDA, that should still be protected. For more on the subject, check out our NDA site.