GENERALLY, WHAT CONSTITUTES A TRADE SECRET IS A QUESTION OF FACT

In construction, contractors maintain competitiveness by compiling, combining, utilizing, or developing proprietary and unique systems.  The systems can be from a cost standpoint (determining general conditions or general requirement costs and percentages including percentages for insurance) or can be with respect to certain construction assembly or delegated design components.  Such proprietary and unique systems are trade secrets to the contractors and efforts are taken to identify such information as confidential when proposing on a project.  Contractors would not want such systems disclosed to others because it would dilute and impact what they believe is valuable and makes them competitive in the marketplace.

Florida’s Uniform Trade Secret Act  (“FUTSA”) creates a statutory cause of action for the misappropriation of trade secrets.  (FUTSA is set forth in Florida Statute s. 688.001 en seq.)  FUTSA displaces or “preempts all claims [such as common law claims] based on misappropriation of trade secrets.”  Alphamed Pharmaceuticals Corp. v. Arriva Pharmaceuticals, Inc., 391 F.Supp.2d 1148, 1167 (S.D.Fla. 2005). See also Fla. Stat. s. 688.008.

Florida Statute s. 688.002 (found here) defines the terms “trade secret” and “misappropriation.”

Of relevance, generally what constitutes a trade secret is a question of factSee DigiPort, Inc. v. Foram Development BFC, LLC, 45 Fla.L.Weekly D2814 (Fla. 3d DCA 2020) (citation omitted).

This is because ‘a trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation of which in unique combination, affords a competitive advantage and is a protectable secret.” Accordingly, ‘[e]ven if all of the information is publicly available, a unique compilation of that information, which adds value to the information, may also qualify as a trade secret.’

Id. (internal citations omitted).

By way of example, in DigiPort, an information technology company sued a building owner for violation of FUTSA as well as common law claims associated with the trade secret misappropriation.  The information technology company claimed it proposed the design of a single, centralized data center for computer hardware where tenants could rent space or use cloud computing services the company provided.  The owner hired a different company to perform the same services and the information technology sued arguing that the owner utilized and disclosed the trade secret information to design and construct the same data center with a different vendor.   The owner claimed the idea was not novel and such data centers were already in existence.   The trial court granted summary judgment in favor of the owner on the company’s FUTSA claim but the appellate court reversed finding that there was a QUESTION OF FACT as to whether the data center the company proposed “contained elements which by themselves may be readily ascertainable in the public domain, but when viewed together may still qualify for trade secret protection.” Digiport, supra (internal citation omitted).  (The appellate court did however affirm summary judgment against the company as to a common law misappropriation claim since it was premised on identical factual allegations as the FUTSA claim and was preempted by FUTSA.)

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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