What can employers do to protect their trade secrets?  Will state courts find that an employee confidentiality agreement is enough?  Or are other company safeguards necessary to protect against employee misappropriation? 

A comprehensive 2011 law review article analyzing trade secret litigation in state courts provides an important contribution to employers' rights to protect their trade secrets.  See David S. Almeling, et al., A Statistical Analysis of Trade Secret Litigation in State Courts, 46 Gonz. L. Rev. 57 (2011).

Key findings include:

• State court misappropriation cases almost always involve business partners or employees (93%).
• Five states heard 49% of all misappropriation appeals:  California, Texas, Ohio, New York, and Georgia.
• Trade secret owners have tough record of success on appeal:  only 41% win in appellate decisions.
• The vast majority of information alleged to be a trade secret include customer lists, internal numbers, and technical programs or formulae. 
• The states rely less on each others' law for persuasive effect (only 7% of state courts noted other jurisdiction's decision on trade secrets).
• The increase in state court misappropriation cases is linear (and modest); not exponential.

In reality, trade secret protection rarely involves only claims for misappropriation.  Employee misconduct in this context usually includes actions such as breach of fiduciary duty (or contract), conversion, intellectual property infringement, and theft. 

Trade secrets—and the protections installed—matter.  State court judges are increasingly the arbiters of whether your proprietary information is secret enough, protected enough, unique enough, or actually used by disloyal employees.  As this study shows, a body of research is now growing which will assist courts with enforcement analysis and strategy.  

However, the time to increase trade secret protections is long before a matter reaches litigation.  As the study highlights, appellate courts find that the most important "reasonable measure" an employer can take to protect trade secrets is an employee confidentiality agreement; followed by physical protections, computer safeguards, and third party agreements.  Courts will want to see that employers have used the full tool kit of protections before they allow employers to fully vindicate their ownership rights.