Reference no: EM131034740

Warrior Wear Limited, a defense contractor, claims that it has a method of producing its flak jackets (“FJs”) that makes them puncture-proof regardless of the caliber of bullet or the power of the weapon used. The FJs account for eighty percent of Warrior Wear’s revenue. The formula for the composition of the key material used in the FJs is kept in a sub-folder on its computer file server, in the “Research and Development” folder, which sub-folder is labeled “Products.” These folders are maintained by the Research and Development Department. Access to the file server requires that each employee has a password, and passwords are only given to bona fide employees once they are hired and once they sign confidentiality agreements. Files on the server are accessible by all such employees, other than files maintained by the Human Resources department, the Legal Department, and the Finance Department.

It is discovered that a competitor, Trident Armaments, has introduced a flak jacket that is similarly resistant to arms fire, and it is discovered that the composition of the key material is the same as the one Warrior Wear developed and uses in its FJ (as well, the physical construction of the FJ is very similar). Warrior Wear sues Trident Armaments, claiming that Trident has stolen trade secrets. Even though the court finds that the key material is the same, with the same chemical composition, the court rejects Warrior Wear’s claim and rules in Trident’s favor, finding that there was no theft of trade secrets, although the court finds that Trident induced three Warrior Wear employees to violate the provisions of their confidentiality agreements with Warrior Wear. In your estimation, why did the court hold that Trident did not steal trade secrets from Warrior Wear?