Uniform Trade Secret Act Case

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THE COVENANT NOT TO COMPETE IS ENFORCEABLE AS A CONTRACT TO PROTECT TRADE SECRETS BECAUSE THE RECIPE IS SECRET, VALUABLE, AND REASONABLY PROTECTED FROM BECOMING PUBLICLY AVAILABLE.

Under the Colorado Uniform Trade Secrets Act, a trade secret consists of information used in one’s business or profession that is secret and of value, and “the owner thereof must have taken measures to prevent the secret from becoming available to persons other than those selected by the owner to have access thereto for limited purposes.” Colo. Rev. Stat. § 7-74-102(4) (2017). In short, three elements (i.e., secrecy, value, and reasonable precautions) must be satisfied to establish that a trade secret exists. Further, Colorado courts apply several factors to determine …show more content…
Unlike the designer in Hawg Tools, whose design was a mere modification of an established model available to the general public, Mr. Brixton and Mr. Edmonds discovered and developed the recipe through their expertise and experimentation. Until HAB hired additional employees to expand their business, the information was only known by the three founders. Although two or three employees gained the access to the herb through Mr. Daniels, all the employees at HAB knew that the recipe as a whole was confidential and inaccessible. Moreover, the special herb as an essential ingredient was discovered and proven effective in transforming the flavor of the Ale by Mr. Brixton’s mother. With the improved flavor, the Ale won first prize in recognition of its “taste and innovation” at the Colorado Oktoberfest. Thus, despite the fact that some magazines and websites have addressed the use of a prolonged boiling time and pure mountain water for beer production, these pieces of public knowledge along with the special herb as a combination should be reasonably considered unique to the company and innovative to the regional brewery …show more content…
Brixton and Mr. Edmonds spent considerable time and money experimenting with different boiling periods and various ingredients before they acquired the secret recipe for the Ale. After winning first place at the Colorado Oktoberfest, the demand for the Ale has increased so significantly that the founders had to expand the company to produce more beer. Competitors of HAB could reasonably anticipate a similar market success if they could duplicate the recipe and produce beer with the same unique flavor as that of the Ale. In line with Saturn Sys., where the plaintiff successfully established the value of its debtor information by showing how competitors could benefit from using it, our client’s recipe should also be deemed valuable because it would be an advantage for HAB to protect it from becoming available to competing beer
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