Many of us have had to get used to videoconferencing. But that communication platform comes with its own challenges in protecting trade secrets. The Delaware Court of Chancery in Smash Franchise Partners, LLC v. Kanda Holdings, Inc. denied a preliminary injunction motion because, among other reasons, the plaintiff failed to show a reasonable likelihood that it took reasonable efforts to protect its alleged trade secrets when it disclosed the information on a Zoom call. C.A. No. 2020-0302-JTL (Del. Ch. Aug. 13, 2020), vacated in part on other grounds. Smash used the same Zoom meeting code for all its meetings, did not require that participants enter a password, did not use the “waiting room” feature to screen meeting participants, and did not take roll of each person attending the meeting (some of whom could not be identified). In other words, anyone who had the Zoom meeting code could enter the meeting and receive the confidential information. Although Zoom offered these security measures, the plaintiff’s failure to use them showed a lack of reasonable efforts to protect the information.
This is a cautionary tale about ensuring that companies utilize appropriate protections while videoconferencing (or using other technological platforms more generally). Just as companies should not let strangers walk into in-person meetings about trade secrets, companies should adopt protections when those meetings occur remotely. Beyond videoconferencing, companies should also consider technological measures that help protect confidential information during remote work. Even apart from whether a court will find that the efforts were reasonable, a company never wants to lose its trade secrets when it could have safeguarded them by using readily available tools.