Trade secrets and Colorado Law
In 1986, Colorado enacted the Uniform Trade Secrets Act, which created protections for companies attempting to keep confidential information from falling into the hands of their competitors. The statute lists some types of information that might qualify for trade secret protection, including designs, formulas and customer lists. The Uniform Trade Secrets Act allows for the recovery of monetary damages, attorneys fees and in some cases punitive damages against those who misappropriate trade secrets.
Although it is difficult to define exactly what a trade secret is, Colorado courts consider several factors in determining if information is a trade secret, including:
- Whether it is known outside the business
- How many people inside the business know about it
- Whether the business takes steps to keep it secret
- The value in keeping it secret
- The amount of money spent in developing it
- The time and expense it would take for others to acquire it
While confidential information gained during employment may be protected as a trade secret, it’s important to note that general knowledge regarding how a business operates is not a trade secret. Additionally, information and inventions already known to competitors—including those that are patented—are not trade secrets.
Employees and trade secrets: what you should know
Because trade secret agreements between employees and employers are one exception to the general rule that non-compete agreements in the state of Colorado are invalid, employers often try to disguise non-compete agreements as trade secrets agreements. Colorado courts have considered and rejected this approach, ruling that trade secrets agreements must be no more restrictive than necessary to protect an employer’s interests. This means that employers cannot draft overly broad trade secrets agreements in an attempt to restrict whom their employees can work for in the future.
Defense and litigation of trade secrets cases is complex, particularly because employers often have considerably more resources at their disposal than employees. The Law Office of Paul Maxon has been successfully litigating trade secrets cases for years, and has a perfect record defending Colorado employees in these matters. If you feel you have a trade secrets issue you need assistance with, please contact us now at 303.473.9999 to schedule your consultation.