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Minn. Stat. § 325C.01 requires that a trade secret derive independent economic value from not being generally known and not being readily ascertainable. This does not mean that the owner of the trade secret must be the only one in the market. Several developers of the same information, for example, may have trade secret rights in that information. If an outsider would obtain a valuable share of the market by gaining certain information, then that information may be a trade secret if it is not known or readily ascertainable.
Respondent Electro-Craft Corporation ("ECC") sued appellants Controlled Motion, Inc. ("CMI") and CMI's president, John Mahoney, (a former employee of ECC) for misappropriation of trade secrets. ECC claimed that CMI and Mahoney improperly copied the designs of ECC's electric motors. The district court found that misappropriation had occurred and also found CMI and its president in contempt for violating a temporary restraining order.
Had there been trade secrets involved using the test of Minn. Stat. § 325C.01 (1982)?
The court concluded that there were no trade secrets at issue because ECC had not used reasonable efforts to maintain secrecy. No misappropriation had occurred because a duty of confidentiality arises in an employer-employee relationship only as to information which the employer has treated as secret. However, the court affirmed the contempt order because found CMI and its president chose to violate the injunction rather than seeking its modification, thereby demonstrating disrespect for the court.