SW Legal studies in Business

Protected Proprietary Process Not Trade Secret if Subject to Reverse Engineering
Description Mississippi high court held that while a company did make efforts to protect its bid process on steel fabrication jobs, and the process was valuable to the firm, a person skilled in the field could figure out the bid process, so it was not a trade secret.
Topic Intellectual Property
Key Words Trade Secrets; Proprietary Procedures
C A S E   S U M M A R Y
Facts GSI is a steel fabricator—a contractor that makes steel components for various construction projects. Scott Marshall used to work for GSI as an estimator—he determined how much GSI could bid on a project and still earn a profit. Scott asked his brother, Alan Marshall, to write a program to help him with estimates. Alan did so and was not paid for his work. Scott used the program while he worked at GSI. When Scott left GSI, he and Alan tried to market a new version of the program to sell to project estimators. GSI sued, contending that the key elements of the bid estimation process in the program were stolen from GSI by Scott, and so constituted a trade secret. The trial court enjoined the brothers from marketing the program; they appealed.
Decision

Reversed. The process by which bids were estimated was easy to figure out by proper means and hence was not a trade secret. While the process has value to GSI, a person competent in the field could figure it out by reverse engineering . GSI provided evidence that it did protect the secrecy of its bid process, but the process is still not a trade secret. The fact that Marshall never signed a non-disclosure agreement is not relevant to the outcome, as he would have a duty not to use trade secret information in any event.

Citation Marshall v. Gipson Steel, Inc., 806 So.2d 266 (Sup. Ct., Miss., 2002)

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