- Trade Secret: “Trade Secret” generally is all forms and types of information where the owner has taken reasonable measures to keep such information secret and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.
- Misappropriation: While the definition of “misappropriation” is quite broad, it can be summarized as the acquisition, use, or disclosure of a trade secret of another by a person who knows, or has reason to know, that the trade secret was acquired by improper means. Additionally, misappropriation includes acquisition, use, or disclosure by a person who knew, or had reason to know, that the trade secret was a trade secret and his or her knowledge of the trade secret had been acquired by accident or mistake.
Protection for Trade Secrets under DTSA
- Audit and Identify: Perform an audit of corporate assets to identify and designate trade secrets and determine where trade secrets are maintained and determine who within the healthcare entity and outside the healthcare entity should have access to them.
- Review and Revise Vendor Agreements: Since a healthcare provider’s agreements with other parties usually include access to data and confidential information, healthcare providers should review their non-disclosure agreements and other confidentiality and non-disclosure-type agreements to ensure they are sufficient to identify and protect trade secrets.
- Notify Employees and Independent Contractors: For all new and amended contracts or agreements that govern the use of trade secret or other confidential information, healthcare providers must give employees notice of DTSA’s immunity for whistleblowers as discussed above. Healthcare providers may comply with this requirement by cross-referencing a policy document provided to the employee that sets forth the employer’s internal mechanism for reporting a suspected violation of law. If a provider fails to provide notice to an employee or contractor and then files suit against the individual for misappropriation of a trade secret, the employer cannot be awarded exemplary damages (up to two times the amount of compensatory damages) or attorneys’ fees. Additionally, a provider’s failure to provide notice may be used by an employee/independent contractor as evidence in a subsequent trade secret misappropriation suit that there was no agreement in place regarding trade secrets.
For assistance with protecting your organization’s trade secrets, as well as revising your confidentiality or employment agreements in light of DTSA, please contact Peter Domas at 248-433-7595, Jena Grady at 602-285-5056 or any member of Dickinson Wright’s Healthcare Practice Group.