Sally Albertazzie

According to a federal court in Louisiana, software developed exclusively with government funding may lose "trade secret" status even as against third parties, at least if the developer fails to take steps to maintain the secrecy of the source code. In L-3 Communications Westwood Corp. v. Robichaux, the plaintiff alleged that several of its former employees had inappropriately used code copied from company laptops to establish a competing defense contractor. L-3 claimed violations of several laws, including Louisiana's Uniform Trade Secrets Act. But the court found that the source code at issue was not a trade secret, since L-3 had granted the government unlimited rights to the software containing the code and had not used "efforts reasonable under the circumstances to maintain [its] secrecy." The upshot for companies that develop or sell software (or hardware) to the government is to make sure that they take all necessary steps in their contracts or other agreements with the government to identify and protect trade secrets.