Reference no: EM13520554

Reed Tires, a tire company, claims that it has a method of producing its tires that makes them puncture-proof in almost all road conditions. The puncture proof tires account for eighty percent of Reed’s Tires’ revenue. The formula for the rubber and composition blueprint are kept in a sub-folder on its computer file server, labeled “Products.” Access to the file server requires that each employee has a password, and passwords are only given to bone fide employees once they are hired and once they sign confidentiality agreements. Files on the server are accessible by all employees, other than files maintained by the Human Resources department, the Legal Department, and the Finance Department. It is discovered that a competitor, Elin Tires, has introduced a line of tires that are puncture proof, and it is discovered that the composition of the tires are the same as the ones Reed sells. Reed sues Elin, claiming that Elin has stolen trade secrets. The court rejects Reed’s assertion and rules in Elin’s favor, although it finds that Elin induced three Reed employees to violate the provisions of their confidentiality agreements with Reed. In your estimation, why did the court hold that Elin did not steal trade secrets from Reed?