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Richard Raysman and Peter Brown

It is axiomatic that trade secret protection applies only to confidential information. In almost all circumstances, broadcasting to the world the intricate details and applications of a trade secret extinguishes whatever “property right” the holder once possessed. What is a sufficient method of contractually notifying a software user of the trade secret status of certain information is a closer question. According to a recent case from the Southern District of New York, a purported holder of a trade secret cannot omit a confidentiality provision from its terms of use and then claim trade secret status after. Broker Genius v. Zalta, No. 17-cv-2099, 2017 WL 5991831 (S.D.N.Y. Dec. 4, 2017). In Broker Genius, the court held that the inconspicuous language of the licensor’s terms of use, coupled with its routine and frequent disclosure of the entire architecture of the user interface of the software supposedly protectable as a trade secret, precluded licensor’s successful motion for injunctive relief for trade secret misappropriation.

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