Reasonable measures to protect software’s functionality as a trade secret in software licensing: a lesson from Turret Labs USA, Inc. v CargoSprint, LLC

In the United States, when a misappropriation case is brought in a federal district court, a plaintiff must allege enough facts in her complaint to indicate that the alleged trade secret satisfies the definition of ‘trade secret’. One element is the ‘reasonable measures’ requirement mandating a plaintiff to prove that he has taken reasonable measures to keep trade secret information secret. This article discusses an appellate court decision, Turret Labs USA, Inc. v CargoSprint, LLC, finding that the plaintiff’s trade secret did not satisfy the ‘reasonable measures’ requirement. This case is important particularly to the software industry because the plaintiff’s failure may teach other software developers a lesson of how to use a confidentiality agreement to protect software’s functionality. The decision indicates that when software is intended for end-users, to meet the ‘reasonable measures’ requirement, software’s functionality as something observable or apparent to these end-users must depend on a confidentiality agreement with an anti-reverse-engineering provision. The scope of confidentiality must cover intermediaries and end-users of a software developer.