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Court Approves Trade SecretsThe legal parameters of the Missouri Uniform Trade Secret Act (MUTSA) are a frequent issue addressed by both Missouri federal and state courts. While MUTSA contains a specific definition of “trade secret,” a court must complete its analysis of particular information on a case-by-case basis.

MUTSA defines a “trade secret” as information or data that: “(a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonably under the circumstances to maintain its secrecy.”

In a recent lawsuit, a consultant was retained to identify tax incentives for a client. For several months, the consultant worked to identify such incentives available from various government entities. After the client terminated the parties’ agreement, the consultant sued in federal court with a claim for misappropriation of its trade secrets.

In its complaint, the consultant asserted that “processes, procedures, methods, methodologies, associations, contacts, knowledge and/or information regarding business, economics and/or employment economic incentives available from governmental entities” are trade secrets.  The federal court ruled that such an allegation was too conclusory to establish the existence of a trade secret. In addition, the court found that information about tax incentives is publically available and therefore not a trade secret.

Finally, the consultant claimed that its “unique compilation of publically available information” is a trade secret. The court was unpersuaded. The judge reasoned that the consultant’s advice is similar to the legal advice an attorney gives a client.

“While legal advice and Plaintiff’s advice to Defendant may be confidential, neither type of advice is a trade secret,” the judge wrote in his opinion.