Del. Ruling Offers Trade Secret Reminders For Startups

Law360 (July 18, 2018, 1:10 PM EDT) -- An emerging company often faces a tension with its potential outside investors over its trade secrets. The company wants to protect its trade secrets from competitors, so it often requires its directors — including those representing investors — to sign nondisclosure agreements. On the other hand, investors often require the emerging company to acknowledge their right to invest in other companies in the same industry. The Delaware Court of Chancery recently addressed this tension, as well as the pleading obstacles that a company must overcome to raise a claim that its trade secrets were misappropriated.

Alarm.com, a home security company, alleged...

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