Suppliers' Names Deemed Privileged as Trade Secret

Last week, a California appellate court which sided with Costco in its bid to prevent disclosing the names of its clothing suppliers on the grounds that this information was deserving of judicial protection as a trade secret. As we have previously noted, it is incumbent on the party asserting that certain information, such as a supplier's identity, be protected from disclosure in in a commercial, small business litigation as privileged matter or a trade secret, to demonstrate that this information was not readily obtainable from another public source, as well as what concrete steps and expense the business took to develop and protect this proprietary list. Otherwise, under New York law, the Court is obliged to compel the disclosure of the list.

Consequently, I was hoping that the California appellate court would elaborate on what specific steps Costco took to convince the Court that their clothing suppliers'  identities were privileged matter worthy of protection from disclosure as a trade secret, if only to provide a measure of comparison to New York law. Unfortunately, after reading the opinion, the Court clearly glossed over this topic, stating in cursory fashion that Costco produced some evidence that its list of suppliers had monetary value, and that it made significant strides to make sure that the names and addresses of its suppliers did not become public.