Businesses are built through hard work and significant investment. One of the most significant investments, and thus greatest assets to a business, is the investment of time and resources in its people. Protecting that investment is often crucial to the brand and to the future of a business. When people have been entrusted with trade secrets, and when those people suddenly depart the business or compromise their loyalty, significant risks exist surrounding a business’s trade secrets. It is important to understand and protect trade secrets in order to maintain a competitive advantage in the marketplace.
Knowing the applicable state and federal laws, and taking the necessary steps to protect trade secrets, can help to ensure that a business remains competitive. While litigation can be costly and time-consuming, sometimes it becomes necessary. Working to protect and defend the core of a business by upholding the integrity of its valuable intellectual property rights and its investment in its people is one of the most critically important challenges that a business faces.
We often find ourselves assisting clients when someone has taken trade secrets from them. There are a variety of legal processes and mechanisms that we use to enforce legal rights related to trade secrets. But an important threshold question is this: what Arkansas laws govern trade secrets? There are a few commonly discussed laws such as the trade secret statute and the applicable rule of evidence. However, even beyond those, Arkansas has quite a few civil statutes and regulations that set the state law on trade secrets, and we will highlight some of those in this blog post.
First, the go-to place in the Arkansas code to begin assessing claims regarding trade secrets is the Arkansas Uniform Trade Secrets Act. Ark. Code Ann. § 4-75-601, et seq.
Next is the privilege found in Arkansas Rule of Evidence 507, establishing that a person may refuse to disclose or prevent others from disclosing trade secret information. However, this privilege may not be used to conceal fraud or other injustices, and it applies to the trade secret owner, the owner’s agent, and the owner’s employee.
Arkansas Rule of Civil Procedure 26(c)(7) provides another valuable safeguard, establishing that on motion by a party or a person from whom discovery is sought, the court may order the confidentiality of a trade secret or other research. The court can order that the information either not be disclosed, or be disclosed only in a designated manner.
But those commonly referenced trade secret laws are just the start. Here are some other Arkansas civil statutes and regulations that also govern trade secrets in Arkansas:
Making decisions about when and how to enforce the various civil rights and responsibilities outlined above can be a complex decision. Often, we advise clients on making this decision in tandem with enforcement decisions about confidentiality agreements, non-solicit agreements, and non-compete agreements, to name a few. There is no one-size-fits-all approach to this decision making, and the best course of action often depends on the unique circumstances and goals of each client.
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