Lost in the Cloud?: The Implications of Cloud Computing for Trade Secret Protection

Posted: 4 Apr 2012

See all articles by Sharon K. Sandeen

Sharon K. Sandeen

Mitchell Hamline School of Law; Hanken School of Economics

Date Written: April 4, 2012


The computer industry and media are all abuzz about cloud computing. According to the providers of cloud storage services, businesses around the world can reduce the costs of acquiring and maintaining their computer systems by storing their documents and data in the cloud. Instead of having to maintain an expensive collection of centralized servers, businesses can utilize the server capacity of a third party that promises to be available 24/7 and to provide “scalable” capacity for all of its clients’ needs.

This article explores the following questions: What if information stored in the cloud constitutes trade secrets? To what extent does the use of a cloud storage service undermine the trade secrecy of remotely stored information?

The article looks closely at both the law governing reasonable efforts and the practices of the cloud computing industry. It begins in Section I with an overview of the evolving cloud computing industry. In Section II it examines the contractual agreements that are offered by various cloud storage services with a focus on those provisions that relate to the confidentiality and security of stored information. A brief explanation of the requirements for trade secret protection is provided in Section III, followed in Section IV by a discussion of the reasonable efforts requirement as applied to the sharing of information with third parties. Section V then applies the reasonable efforts requirement to cloud storage services by examining their relationship with their customers.

Keywords: intellectual property, trade secret law, cloud computing, reasonable efforts to maintain secrecy, public disclosure

Suggested Citation

Sandeen, Sharon K., Lost in the Cloud?: The Implications of Cloud Computing for Trade Secret Protection (April 4, 2012). Available at SSRN: https://ssrn.com/abstract=1685402 or http://dx.doi.org/10.2139/ssrn.1685402

Sharon K. Sandeen (Contact Author)

Mitchell Hamline School of Law ( email )

875 Summit Ave
St. Paul, MN 55105-3076
United States

Hanken School of Economics ( email )

P.O. Box 479
FI-00101 Helsinki, 00101

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