Encap v. Scotts Co.

Trade Secrets Cannot be Public Knowledge and Must Provide a Competitive Advantage.

Opinion (Griesbach): Plaintiff Encap, LLC (“Encap”) is an innovative lawn and garden technologies company. Defendants Scott Company, LLC, The Scotts-Miracle Grow Company, LLC, and OMS Investments, Inc. (collectively “Scotts”) are also companies within the horticulture and agriculture industry. In 2002, Encap wrote and distributed a confidential information memorandum ("CIM") to Scotts and other leaders within the lawn and garden industry. In the CIM, Encap disclosed a new seed product and a marketing plan to take advantage of growth and revenue opportunities within the industry. Encap alleged that Scotts misappropriated its’ trade secret by implementing the detailed plan described in the CIM. Scotts moved for summary judgment with respect to the trade secret misappropriation claim. The Court defined trade secret as “information, including a formula, pattern, compilation, program, device, method, technique or process that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.” Most importantly, a trade secret is concealed knowledge. Once a trade secret has been disclosed or is “readily ascertainable” it loses its value and is no longer classified as a trade secret. In this case, the Court determined that the generality of the marketing plan Encap asserted as trade secret can be discerned from its patents, became public knowledge through disclose of the plan in the CIM, and is readily ascertainable marketing knowledge. Trade secret law is used to “protect a continuing competitive advantage.” A marketing plan “does not by confidentiality create a continuing competitive advantage because once it is implemented it is exposed for the world to see and for competitors to legally imitate.” Defendant’s motion for summary judgment is GRANTED.