Farmers Must Actively Protect Data to Secure Trade Secret Protections
Updated: Jul 9, 2020
By Ashley Ellixson
In our recent publication on Ownership and Protections of Farm Data, we suggested that trade secret would be the best candidate among intellectual property laws to protect farm data. In follow-up discussions, we realized we needed to revisit a key point of our publication which may have been ignored. That point is: to be protected by trade secret, a farmer must actively protect their farm’s data. Although we do not know for certain what steps the courts will require, we know that unless the farmer takes active steps to protect the data, the courts will not treat the data as a trade secret.
To be successful on a misappropriation claim, or an instance where a farmer’s data has been used in a way not explicitly allowed or given permission for, the farmer must first prove the information at issue is actually a trade secret. Next, the farmer must prove the data was misappropriated, or wrongly acquired by another party. The court will look at whether there were reasonable measures in place to ensure the secrecy of the data in order for the farmer to prevail in a trade secret lawsuit.
What are these reasonable measures? Well, we do not know exactly since we do not know whether a court would consider farm data a trade secret. But what we do know can be based on what courts do with other forms of information determined trade secrets. And what we know for sure is courts look for active measures taken to ensure privacy.
The following is not an exhaustive list; these are simply potential steps in helping to protect farm data as a trade secret:
Potential “Reasonable Measures” to Protect Farm Data
Have all employees sign a nondisclosure agreement regarding data/secrets. You must define what is and is not trade secret in the context of your operation.
Ensure new employees, by signing a nondisclosure agreement, do not use or bring former employers’ data/information while working for you.
When creating backup copies of data, make sure no other entities have access to these backups.
Control employee access to information.
Instill password protections for electronic servers and files.
Regulate visitor and employee access if possible in areas where sensitive data may be accessible.
Conduct ongoing employee training on the measures used to protect the farm data, when convenient for your operation.
Require a majority vote by farm operators before data are shared with a third party.
An additional issue arises when employees leave the farm operation or are otherwise no longer employed by the farm. The farmer may be able to ensure any access the employee had to farm data is stopped, which may mean changing passwords, access points, etc. At the employee’s departure, consider going over the signed nondisclosure agreement and ensure the employee knows that the obligations remain in effect.
It is important to discuss these points and considerations with an attorney to make sure the measures work for your operation and are tailored to your unique situations. This post is not intended to be legal advice but informational in nature to help ensure farm data protection in the context of trade secret. In order for farm data to be safeguarded by trade secret, it is imperative that the farmer takes reasonable measures in protecting farm data. Simply doing nothing will not help the farmer in a misappropriation lawsuit in court.