If you are thinking about publishing something that looks like a company's internal -- and possibly secret -- document or information, you need to think about the potential legal consequences under trade secrets law. As explained in Basics of a Trade Secret Claim, if a document or piece of information turns out to be a trade secret, then you might be liable for damages, and a court might order you to take down the material. But not every company document is a trade secret, and a company ordinarily cannot stop you from publishing embarrassing -- but not secret or economically valuable -- information. And even if you publish a bona fide trade secret, the First Amendment of the United States Constitution may protect you from having to take it down and even from paying damages, especially if you publish the trade secret in order to report or comment on a matter of public concern. Thus, if you get your hands on a secret document that shows that a steel plant is spewing pollutants into a local river, the U.S. Constitution may protect your decision to publish this document even if you are aware that your source acquired it through improper means (e.g., theft or breach of a confidentiality agreement). As described in more detail below, however, the law is not entirely clear on these points, and you ultimately will have to make a decision about what to do based on your own willingness to take risks.
The sections below speak in terms of "defenses" -- i.e., what you could argue to protect yourself assuming someone sued you for publishing a trade secret. The focus on defenses should not confuse you into thinking that this information is not valuable before a lawsuit happens. Knowing how you might defend yourself can help you evaluate whether your publishing activity is legally protected or whether you face a serious risk of unwanted legal consequences.
Defenses Based on the Legal Definition of
a "Trade Secret" and "Misappropriation"
These defenses relate to the legal definition of a "trade secret" and the act of "misappropriation." For background, see Basics of a Trade Secret Claim.
What You Published Was Not a Trade Secret
(1) Not Secret
Your surest defense to a trade secrets claim is to show that the information you published was not a secret when you published it because it was already "generally known." For example, you generally cannot be liable for trade secret misappropriation if you get the information in question from some published source, like a newspaper or book. Similarly, most material previously posted on the Internet is no longer secret. For example, in DVD Copy Control Association v. Bunner, 10 Cal. Rptr. 3d 185 (Ct. App. 2004), a trade association claimed that a website operator had misappropriated its trade secret when he posted DeCSS -- a code for breaking its DVD encryption technology -- on his website. A California appellate court held that DeCSS was not a trade secret when the defendant posted it because hundreds of other websites had already done so. Similarly, several federal district courts have found that numerous Church of Scientology documents were not trade secrets because many websites published the documents before the defendant. See, e.g, Religious Tech. Ctr. v. Netcomm On-Line Commc'n Servs., 923 F. Supp. 1231, 1256-57 (N.D. Cal. 1995); Religious Tech. Ctr. v. Lerma, 897 F. Supp. 260, 266 (E.D. Va. 1995).
Note, however, that publication on the Internet does not always strip information of its trade secret status. For example, information that appears only on an obscure site or sites, and information that appears and quickly gets taken down may remain a trade secret, and you might be liable for publishing it if you have reason to know that it was acquired through improper means.
Even if information was secret when you first disclosed it online, if it becomes public knowledge by the time a plaintiff asks a court for an injunction against you (i.e., an order requiring you to take down the material and not publish it in the future), you may convince the court not to issue the order. The court may not issue an injunction without the plaintiff showing that it would be "irreparably harmed" absent the order requiring you not to publish the trade secret. But if the information is already publicly available, then you cannot harm the plaintiff by publishing what everyone already knows. Even if an injunction is improper, however, a plaintiff can still seek money damages from you.
(2) Generates No Economic Value
You may also avoid trade secret liability if the information you published could not give its owner an economic advantage over its competitors by remaining secret. You could use this defense if a company tries to use trade secrets law to shield embarrassing information that does not relate to its competitive position vis-a-vis its rivals. For example, in MicroStrategy Inc. v. Business Objects, S.A., 331 F. Supp. 2d 396 (E.D. Va. 2004), a court determined that an email sent by a company's CEO to all employees about the the company's financial difficulties was not a trade secret. The email, while interesting to some, had no potential economic value and was about to be made public in a press release anyway.
In another case, Buffets, Inc. v. Klinke, 73 F.3d 965 (9th Cir. 1996), the owners of the Old Country Buffet restaurant chain claimed another chain had stolen their trade secrets when it copied their recipes, but the court determined the recipes had no economic value. The court reasoned that "there was no demonstrated relationship between the lack of success of [the] competitors and the unavailability of the recipes" and, because, in fact, OCB's cooks had used simplified versions of the recipes in preparing their food, so it was unlikely the recipes themselves had conferred a benefit on OCB.
(3) No Reasonable Efforts to Maintain Secrecy
One other way you can defend yourself is the owner of the "secret" did not take reasonable steps to maintain its secrecy. The exact steps required will vary depending on the secret involved, but there is a good chance that information is not a trade secret if a company has failed to take any affirmative steps to protect it. For example, in Hoffmann-La Roche Inc. v. Yoder, 950 F. Supp. 1348 (S.D. Ohio 1997), a federal district court found a company had failed to take sufficient to make a reasonable effort to ensure secrecy because it did not require its clinical investigators to sign confidentiality agreements, it failed to stamp documents "confidential" or "secret," it widely disseminated the information, and it did not use other controls like restricting access to the physical location of the secret, the use of safes, or discussing the importance of confidentiality with people who received the information. If you find documents or information online, you may have a decent argument that the owner did not maintain reasonable efforts to keep the material secret (in addition to the argument that the material is "not secret," as explained above).
You Did Not Commit Misappropriation
Another possible defense is that neither you nor your source(s) used improper means to obtain the information. The Supreme Court noted in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974), that "discovery by fair and honest means, such as by independent invention, accidental disclosure, or by so-called reverse engineering" is not misappropriation. Often, this argument would go hand and hand with the argument that the information in question was not secret. If the information is publicly available, then you generally do not need to rely on theft, deception, or breach of confidentiality in order to get a hold of it.
For example, in Religious Technology Center v. Lerma, 908 F. Supp. 1362 (E.D. Va. 1995), the Washington Post published Scientology documents it had obtained from a publicly available court file and the Internet. The district court determined that the Post had not misappropriated the Church of Scientology's trade secrets because the paper obtained the materials from legitimate, publicly available sources. The court further noted that "[a]lthough the person who originally posted a trade secret on the Internet may be liable for trade secret misappropriation, the party who merely downloads Internet information cannot be liable for misappropriation because there is no misconduct involved in interacting with the Internet." Similarly in DVD Copy Control Association v. Bunner, 75 P.3d 1 (Cal. 2003), the California Supreme Court considered a case where a programmer had reverse engineered DVD encryption software. While the majority of the court did not consider the issue, Justice Moreno, concurring, expressed serious doubt that reverse engineering was an improper act. In their versions of the Uniform Trade Secrets Act, California, Illinois, and Oregon explicitly state that reverse engineering alone does not constitute misappropriation.
Defense Against An Injunction Based on the First Amendment
Even if you are dealing with a bona fide trade secret and you have reason to believe that your source acquired it improperly, the First Amendment of the U.S. Constitution may stop a court from ordering you not to publish it. You may be protected by something known as the "prior restraint" doctrine. The Supreme Court held in the Pentagon Papers case, New York Times v. United States, 403 U.S. 713 (1971), that a plaintiff must make an extraordinary showing of harm in order to obtain a court order that stops the news media from publishing information on a matter of public concern. The United States government had sought an injunction to prevent the New York Times and Washington Post from publishing information from a classified study on the Vietnam War. Though the materials "pose[d] substantial dangers to national interests," the court was unwilling to stop the newspapers from printing them. As one district court found in Religious Technology Center v. Lerma, 897 F. Supp. 260 (E.D. Va. 1995), "If a threat to national security was insufficient to warrant a prior restraint ... the threat to plaintiff's ... trade secrets is woefully inadequate."
Although the law is not entirely certain on this point, a number of courts have extended the prior restraint doctrine to trade secret cases. In CBS v. Davis, 510 U.S. 1315 (Blackmun, Circuit Justice 1994), after CBS News shot the operations of a meatpacking company on an undercover camera, the company sought and obtained an injunction preventing CBS from broadcasting the video footage, claiming that the broadcast would disclose the company's trade secrets. Acting pursuant to a special procedure, Justice Blackmun of the Supreme Court stayed the injunction, ruling that the possibility of economic harm was not a sufficient justification for a prior restraint. (Note that this case does not have great value as precedent because the full Supreme Court did not decide the case.)
Courts have applied the prior restraint doctrine to Internet publishers as well as to the mainstream media. In Ford Motor Company v. Lane, 67 F. Supp. 2d 745 (E.D. Mich. 1999), the auto company sought a court order preventing a blogger from posting the company's internal documents online. The documents were provided to the blogger by anonymous sources (which the court believed were likely former and current Ford employees). Because Lane had reason to know that his sources had given him Ford's trade secrets in violation of their confidentiality agreements, the federal district court determined that the blogger was likely violating the Michigan Trade Secrets Act. Nevertheless, the court held that the prior restraint doctrine prevented it from issuing an injunction requiring Lane to take the confidential information off his blog. Protecting the company's vanity and commercial self-interest was not a sufficient ground to stop the blogger from publishing, the court noted. Another federal district court came to a similar conclusion in Religious Technology Center v. F.A.C.T.NET, Inc., 901 F. Supp. 1519 (D. Colo. 1995)
In contrast, other courts have upheld the use of an injunction to bar publication of a trade secret, at least in some situations. In DVD Copy Control Association v. Bunner, 75 P.3d 1 (Cal. 2003), the California Supreme Court found that an injunction prohibiting the posting of DeCSS was not an invalid prior restraint. However, the court expressly limited its reasoning to publication of secret information that is not a matter of public concern. Therefore, publication of trade secrets for news reporting or news commentary would not fall under the Bunner case. In Garth v. Staktek Corp., 876 S.W.2d 545 (Tex. App. 1994), a Texas appellate court upheld an injunction barring a company from selling a technology developed with misappropriated trade secrets and from revealing information about the technology to third parties.
Despite the protection offered by the prior restraint doctrine, you should be aware of two caveats. First, the prior restraint doctrine may not help you in a situation where you have personally signed an agreement promising to keep materials confidential. In Ford Motor Company v. Lane, 67 F. Supp. 2d 745 (E.D. Mich. 1999), the court noted that "use of trade secrets in violation of a confidentiality agreement or in breach of a fiduciary duty is not protected by the First Amendment." For example, if you agree in an employment contract not to disclose your employer's trade secrets and then post that information on your blog, the First Amendment may not protect you from an injunction. On the other hand, if you receive trade secrets from a source, the First Amendment may protect you, even if that source violated a confidentiality agreement or otherwise acted improperly. Second, the prior restraint doctrine only stops a court from ordering you not to publish information. It does not stop a court from holding you liable for civil damages or criminal penalties. As discussed immediately below, however, other First Amendment considerations may bar civil or criminal liability under certain circumstances.
Defense Against Liability Based on the First Amendment
Beyond protecting you against an injunction, the First Amendment may protect you from civil liability or criminal prosecution for publishing trade secrets. This potential protection stems from a case called Bartnicki v. Vopper, 532 U.S. 514 (2001). In that case, an unidentified person intercepted and recorded a phone call between Bartnicki, a union negotiator, and the the president of the union. Then, the head of a local taxpayer's group received the tape in his mailbox without any indication of where it came from. The head of the taxpayer's group gave the tape to Vopper, a radio commentator, and he played it on the air. Bartnicki sued Vopper for publishing the contents of an illegal recording in violation of federal wiretapping law, knowing or having reason to know that it was illegally recorded. See 18 U.S.C. § 2511(1)(c). Vopper argued his disclosure of the contents of the illegally recorded tape was protected by the First Amendment. Finding that "a stranger’s illegal conduct does not suffice to remove the First Amendment shield from speech about a matter of public concern," the Supreme Court refused to enforce federal wiretapping law against Vopper.
Although no court has yet applied Barnicki to block liability for publication of trade secrets, its reasoning could apply to a trade secret case where a publisher has reason to know that the information was acquired through improper means, but did not himself or herself engage in any misconduct or breach any agreement in order to get the information. The argument goes: Bartnicki protects you from liability when you publish trade secrets relevant to a matter of public concern, when you did not personally steal or breach a duty of confidentiality in order to obtain the information, but rather received it from a source who breached a duty of confidentiality or otherwise acted improperly.
Whether a court would actually accept this argument is far from certain. In Bartnicki, the Court explicitly noted it was not deciding whether the First Amendment would bar liability in a case involving trade secrets, on the assumption that trade secrets would be a matter of purely private concern. If you could show that a trade secret related to a matter of public concern, which it might well if you published it in the process of news reporting, commentary, or criticism, then the general reasoning of Bartnicki might apply to prohibit liability. For example, if you blog about secret documents that show a problem with a car company's emissions standards, then Bartnicki might protect you from liability if you did not yourself engage in improper conduct to get the documents.
Only one court so far has ruled on the application of Bartnicki to trade secrets: the California Supreme Court, in DVD Copy Control Association v. Bunner. While the court found that the trade secrets in issue in Bunner were not protected by the First Amendment, its ruling was based on its belief that those trade secrets, since they were only technical information, did not "involve a matter of public concern [or] implicate the core purpose of the First Amendment." So even in California, if you published trade secrets more directly involving a matter of public importance, you would still have a strong argument that your speech should be protected. For example, if you published secret information showing that a company's voting machines were not working properly, you could argue that the Bunner case should not apply.
Trade Secrets and User-Generated Content
You might be concerned that a user of your website or blog could post trade secrets there without your knowledge or understanding of the character of the information. Section 230 of the Communications Decency Act (CDA 230) protects website owners from many claims based on user comments and other third-party content, but it does not apply to "intellectual property" claims. 47 U.S.C. § 230(e)(2). While the law is not settled yet, the term "intellectual property" may include state trade secrets claims. Thus, if a user posts trade secrets on your website or blog, the owner of those trade secrets may be able to sue you for your user's conduct.
For details on CDA 230, please see our Primer on Immunity and Liability for Third-Party Content Under Section 230 of the Communications Decency Act.