Chapter 28 - § 28.3 • TRADE SECRET LAW

• Jurisdiction: Colorado

§ 28.3 • TRADE SECRET LAW

Trade secrets in Colorado are protected under the Colorado Uniform Trade Secrets Act.¹² The trade secret laws in Colorado exist to prevent commercially sensitive and confidential information from being used or disclosed by those with whom the trade secret owner has a confidential relationship or by improper means.¹³

In the construction industry, an awareness of trade secret law can be valuable both to use as a competitive advantage and to reduce the chances of improperly misappropriating the trade secrets. Businesses who are aware that their commercially sensitive information can inexpensively be protected as trade secrets can build value into their business by taking simple steps to perfect that information as a trade secret. Likewise, it is prudent to be aware of the confidential relationships inherent in any construction industry business, including those of existing and newly hired employees, to ensure that information learned or disclosed through those confidential relationships is not improperly used or disclosed.

The first step in determining whether the trade secret laws are implicated is to determine whether there exists a trade secret at all. Trade secrets can be any information or know-how that: (1) is not publicly available, and (2) provides a commercial advantage. This information could include such things as customer and client lists, production or construction methods, product formulas, marketing strategies, pricing strategies and policies, certain contracts, and any other competitively sensitive information.

In order to determine what is a trade secret, the courts in Colorado have identified a number of factors that will be considered:

• The extent to which the information is known outside the business;
• The extent to which the information is known by those inside the business;
• The savings effected and the value of having the information, as against competitors;
• The effort or money expended in obtaining and developing the information;
• The amount of time it would take third parties to acquire and duplicate the information; and
• Precautions taken to guard secrecy of the information.¹⁴

It is worth pausing to further consider the secrecy requirement. To constitute a trade secret, the information must not be a matter of public knowledge or generally known. If it is generally known, it is not a secret.¹⁵ On the other hand, absolute secrecy is not necessary. The law requires only that the owner take reasonable...