UnIntellectual Property (UnIP): Trade Secret for Sales Data

The Michigan Court of Appeals affirmed a trial court’s grant of summary disposition for the defendants relative to plaintiff’s claim of trade secret misappropriation under the Michigan Uniform Trade Secrets Act (MUTSA).  By way of background, the defendant, Michigan High School Athletic Association (MHSAA), exclusively used the plaintiff as its vendor for sports apparel for years.  However, in 2011, MHSAA chose another vendor, EA Graphics, which was also a defendant, along with its owner.  After plaintiff learned that MHSAA chose EA Graphics, plaintiff filed this action, which included, among other causes of action, a claim for trade secret misappropriation.

The trade secret at issue was plaintiff’s sales data.  In particular, plaintiff had compiled the sales data or information from various MHSAA events over the years.  The Michigan Court of Appeals determined that the sales of MHSAA merchandise at MHSAA events was not a trade secret, under the definition provided by MUTSA.  The plaintiff “was required under the contract to give sales data to MHSAA for MHSAA-licensed merchandise. Thus, the information was not a trade secret belonging to Lighthouse, and it was not improper for MHSAA to discuss sales information of MHSAA merchandise with other potential vendors, including EA Graphics.”

Not surprisingly, this case illustrates another fact specific trade secret misappropriation decision.  Would it have turned out differently if the contract did not require disclosure of the sales data, identified it as a trade secret, or limited its disclosure?  I’ve said it before, and I will say it again, a trade secret misappropriation assessment to determine the validity of one’s claim is always a great first step and may save legal resources in the future.
Lighthouse Sportswear, Inc. v. Michigan High Sch. Athletic Ass’n, Inc., 310777, 2013 WL 3335107 (Mich. Ct. App. July 2, 2013).

 

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