LEB 323 Test 2 Exam Questions and
Answers 100% Pass
Trade Secret - CORRECT ANSWER-Any type of knowledge that is not generally
known and is not readily available through legal means; gives owner competitive
advantage
Trade Secret law is much [broader/narrower] than Patent Law.
Protected trade secrets can also be patented [T/F]. - CORRECT ANSWER-
Broader
False (Registering a patent destroys is secrecy).
3 Items Proved for Trade Secret Misappropriation - CORRECT ANSWER-1.
Information is actually a trade secret
2. Owner maintained reasonable measures to protect secrecy
3. Defendant improperly acquired/used/disclosed TS information
5 Factors for Determining if Information is a Trade Secret - CORRECT
ANSWER-1. Extent to which information is known outside company
2. How difficult it is for someone to independently develop/acquire info
3. Value of information to company
,4. Amount of time/money spent to create information
5. How well company protected the information (if not TS, not protected)
McNutt v. NuMed - CORRECT ANSWER-•McNutt felt he was being squeezed
out of the executive decision making, felt he was about to be fired, so he quit and
made his own competing company
•Called Numed's customers, Numed sued for trade secret misappropriation
•Court said customer names (hospital names) were general knowledge, so no trade
secret info
Combinations of things can be trade secrets. [T/F]
"Negative know-how" - CORRECT ANSWER-True (ex. machinery additions)
Knowledge gained during research/experimentation process that explains what
doesn't work (protectable as well as final results); e.g. cure research teams
4 Factors Pertaining to Extent of "Reasonable Protection" for a Trade Secret
Examples of Security Measures - CORRECT ANSWER-1. Value of information 2.
Cost of additional protective measures
3. How protective measures could interfere with employees' daily jobs
4. How much additional protection these measures actually provide
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
, Restricted areas, locking doors, requiring IDs, strong passwords, surveillance
cameras, fences, "need-to-know" basis, written confidentiality nondisclosure
agreements
Ways to Conduct Misappropriation - CORRECT ANSWER-Illegally: bribery,
burglary, trespassing, tapping telephones, fraudulent misrepresentations (spy)
Improperly: only purpose is to overcome security (ex. aerial photo)
Breach of duty of confidentiality (MOST COMMON - often implied)
2 Methods of Acquiring Trade Secrets that Aren't Misappropriation - CORRECT
ANSWER-1. Someone develops same knowledge on their own
2. Information is found in a product/reverse engineering
(If it's patented, it's still patent infringement either way)
Integrated Cash Mgmt v. Digital Transactions - CORRECT ANSWER-ICM had
combo of previously known elements; qualified as a trade secret
DT misappropriated their trade secret but didn't infringe on copyrights due to
using new code
No large damages awarded (typical of these cases)
Economic Espionage Act; 3 Items to be Proved in Court - CORRECT ANSWER-
Trade law = primarily state law
Answers 100% Pass
Trade Secret - CORRECT ANSWER-Any type of knowledge that is not generally
known and is not readily available through legal means; gives owner competitive
advantage
Trade Secret law is much [broader/narrower] than Patent Law.
Protected trade secrets can also be patented [T/F]. - CORRECT ANSWER-
Broader
False (Registering a patent destroys is secrecy).
3 Items Proved for Trade Secret Misappropriation - CORRECT ANSWER-1.
Information is actually a trade secret
2. Owner maintained reasonable measures to protect secrecy
3. Defendant improperly acquired/used/disclosed TS information
5 Factors for Determining if Information is a Trade Secret - CORRECT
ANSWER-1. Extent to which information is known outside company
2. How difficult it is for someone to independently develop/acquire info
3. Value of information to company
,4. Amount of time/money spent to create information
5. How well company protected the information (if not TS, not protected)
McNutt v. NuMed - CORRECT ANSWER-•McNutt felt he was being squeezed
out of the executive decision making, felt he was about to be fired, so he quit and
made his own competing company
•Called Numed's customers, Numed sued for trade secret misappropriation
•Court said customer names (hospital names) were general knowledge, so no trade
secret info
Combinations of things can be trade secrets. [T/F]
"Negative know-how" - CORRECT ANSWER-True (ex. machinery additions)
Knowledge gained during research/experimentation process that explains what
doesn't work (protectable as well as final results); e.g. cure research teams
4 Factors Pertaining to Extent of "Reasonable Protection" for a Trade Secret
Examples of Security Measures - CORRECT ANSWER-1. Value of information 2.
Cost of additional protective measures
3. How protective measures could interfere with employees' daily jobs
4. How much additional protection these measures actually provide
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
, Restricted areas, locking doors, requiring IDs, strong passwords, surveillance
cameras, fences, "need-to-know" basis, written confidentiality nondisclosure
agreements
Ways to Conduct Misappropriation - CORRECT ANSWER-Illegally: bribery,
burglary, trespassing, tapping telephones, fraudulent misrepresentations (spy)
Improperly: only purpose is to overcome security (ex. aerial photo)
Breach of duty of confidentiality (MOST COMMON - often implied)
2 Methods of Acquiring Trade Secrets that Aren't Misappropriation - CORRECT
ANSWER-1. Someone develops same knowledge on their own
2. Information is found in a product/reverse engineering
(If it's patented, it's still patent infringement either way)
Integrated Cash Mgmt v. Digital Transactions - CORRECT ANSWER-ICM had
combo of previously known elements; qualified as a trade secret
DT misappropriated their trade secret but didn't infringe on copyrights due to
using new code
No large damages awarded (typical of these cases)
Economic Espionage Act; 3 Items to be Proved in Court - CORRECT ANSWER-
Trade law = primarily state law
