Intellectual Property Law

Chapter 22 Putting It Into Words Solution

A client, Barnes & Barnes, LLC, routinely posts its “News & Developments” on its
company intranet, available to all of its 500 employees. On many occasions, it posts plans
to bid on upcoming government contracts, details of its proposals to the government, and
information about the methodology it uses to prepare proposals. Draft a letter to the client
about the risks of such conduct.

Law Firm Letterhead
Date
Barnes & Barnes, LLC
Street Address
City, State Zip Code
Re: Loss of Protection for Trade Secrets

Dear _____:
It is our understanding that Barnes & Barnes, LLC (“B&B”) routinely posts its
“News & Developments” on the company intranet, which is accessible to all 500
B&B employees. This posting often includes the company’s plans to bid on
upcoming government contracts, details of its proposals to the government, and
information on the methodology the company uses to submit proposals.

As you know, a company may maintain the trade secret status of its valuable
commercial information forever, so long as reasonable efforts are made to ensure
that such information remains secret. The information relating to the company’s
proposal plans and bid details and methodology qualifies as trade secret
information because it is valuable commercial information that is not known to
others. Once disclosed, however, such information loses its trade secret status and is
free for anyone to use.

We believe that company-wide posting of information about government contracts,
details of proposals to the government, and the methodology the company uses to
submit proposals puts your information at significant risk of losing trade secret
status. Such information should only be disclosed to those within the company who
have a demonstrated “need to know” such information in connection with their
work responsibilities. Moreover, these individuals should be subject to
nondisclosure agreements whereby they agree not to disclose this or any other
valuable information both during and after their employment with B&B.

Disclosure on a company-wide basis through B&B’s intranet could well lead to
further disclosure by a disgruntled employee or an employee who leaves B&B to
work for a competitor. Once information about B&B bids and proposals is made
public (such as occurs when business newspapers report on such or after the
government awards contracts), then B&B is free to disseminate information
throughout the company. Before public disclosure, however, disclosure of such
valuable commercial information even within the company could lead to a loss of
trade secret status.

Please let us know if you need any additional information about trade secrets and
their proper maintenance or if you would like us to review your “News &
Developments” before it is posted to ensure that the company’s valuable trade
secrets are protected.

Sincerely,

Law Firm