WPI 351.02 Trade Secret—Definition

This instruction defines a term used in WPI 351.01 (Trade Secrets—Burden of Proof). The following instructions should also be used: WPI 351.05 (Independent Economic Value—Definition) and WPI 351.08 (Reasonable Efforts to Maintain Secrecy—Definition).

The instruction is based on RCW 19.108.010.

While the definition of a trade secret is a matter of law under the Uniform Trade Secrets Act, the determination in a given case whether specific information is a trade secret is a factual question. Ed Nowogroski Ins., Inc. v. Rucker, 137 Wn.2d 427, 436, 971 P.2d 936 (1999); Woo v. Fireman's Fund Ins. Co., 137 Wn.App. 480, 487, 154 P.3d 236 (2007) (application of legal test is fact-specific).

Washington case law interpreting “trade secret.” For a trade secret to exist, the underlying information must not be “readily ascertainable by proper means” from some other source, including the product itself. Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 49–50, 738 P.2d 665 (1987); Modumetal, Inc. v. Xtalic Corp., 4 Wn.App.2d 810, 824, 425 P.3d 871 (2018); Belo Mgmt. Servs., Inc. v. Click! Network, 184 Wn.App. 649, 343 P.3d 370 (2014).

Although undefined in the Uniform Trade Secrets Act, a “compilation” has been defined as “something that is a product of the putting together of two or more items: as … an accumulation of many things, elements, or influences.” Lyft, Inc. v. City of Seattle, 190 Wn.2d 769, 782, 418 P.3d 102 (2018) (internal quotes and citation omitted). A compilation of information may constitute a trade secret even though the plaintiff cannot prove that every element of the compilation is unavailable elsewhere. Trade secrets frequently contain elements that by themselves may be in the public domain, but which together qualify as trade secrets. Boeing, 108 Wn.2d at 50; Machen, Inc. v. Aircraft Design, Inc., 65 Wn.App. 319, 327, 828 P.2d 73 (1992), overruled on other grounds by Waterjet Tech., Inc. v. Flow Int'l Corp., 140 Wn.2d 313, 996 P.2d 598 (2000). On the other hand, when the information is in the public domain, and the end product of the information is unoriginal, there is no trade secret. Woo, 137 Wn.App. at 488–89 (combination of public data must be novel and unique); Buffets, Inc. v. Klinke, 73 F.3d 965, 968 (9th Cir. 1996) (stating that a plaintiff must prove novelty to establish trade secret under Washington law); see West v. Port of Olympia, 146 Wn.App. 108, 120, 192 P.3d 926 (2008) (information “must be ‘novel’ in the sense that the information must not be readily ascertainable from another source”).

“[W]hether a customer list is protected as a trade secret depends on three factual inquiries: (1) whether the list is a compilation of information; (2) whether it is valuable because unknown to others; and (3) whether the owner has made reasonable attempts to keep the information secret.” Ed Nowogroski, 137 Wn.2d at 442.

The requirement of secrecy is not absolute so long as reasonable efforts have been taken to maintain secrecy. Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315 (1974); K-2 Ski Co. v. Head Ski Co., 506 F.2d 471, 474 (9th Cir. 1974); Machen, 65 Wn.App. at 327.

Trade secrets are not lost merely by such factors as the passage of time, submission to a licensing agency for purposes of government certification, or confidential disclosures to such persons as employees or suppliers. Boeing, 108 Wn.2d at 52. When the information is given out to employees without advising them of its confidentiality, or of measures to be taken to prevent its being obtained by others, security efforts may not be reasonable, even if the defendant actually obtains the information by improper means. Buffets, 73 F.3d at 968.