Chilling Effects
Home Weather Reports Report Receiving a Cease and Desist Notice Search the Database Topics
Topic HomeFAQsMonitoring the legal climate for Internet activity
Santa Clara University School of Law High Tech Law Institute
 Chilling Effects Clearinghouse > Trade Secret > Notices > Wal-Mart Pre-Warns Against Early Black Friday Ads (NoticeID 15911, Printer-friendly version

Wal-Mart Pre-Warns Against Early Black Friday Ads

October 17, 2007


Sender Information:
Sent by: [Private]
Baker & Hostetler LLP
Washington, DC, 20036-530, US

Recipient Information:
Black Friday Ads -

Sent via: email and express
Re: Improper Relase of the Black Friday Sales Circular for Wal-Mart Stores, Inc.

Dear Sir or Madam,

We represent Wal-Mart Stores, Inc. (hereinafter "Wal-Mart") with respect to its intellectual property matters and defense against unfair competition. It has recently come to our attention that you and/or your company may potentially obtain possession of and ultimately release Wal-Mart's sales circulars, advertisements or other information prior to their authorized release dates. Information regarding Wal-Mart's products, and sales prices therefor, during the November 19th sales period and otherwise, is proprietary and commercially valuable.

Please be advised that the information on Wal-Mart's circulars and advertisements are, prior to their authorized release date of November 19, 2007, confidential and proprietary information of Wal-Mart. The circulars and advertisement, as well as related document,s are also protected by copyright and other laws. Therefore, any unauthorized reproduction, publication, or distribution of the information or materials (e.g., via website) prior to Wal-Mart's authorized release date violates Wal-Mart's rights. Such violations can give rise to liabilities and severe legal penalties. To the extent that the methods of acquisition or use include criminal activity, criminal penalties may also apply.

We have become aware that some publishers may have encouraged third parties (such as printers and newspapers) who lawfully possess the information and materials to inappropriately disclose the information and materials. The law provides liability for those who encourage violations, participate in them or receive economic benefits from them. Therefore, we wish to emphasize and place you on specific notice of the above.

Please feel free to contact me if you have any questions, are aware of any violations, or are approached by any third-party seeking to disclose or provide information about Wal-Mart's commercial activities and plans, such as dates of sales, discount amounts, etc., prior to their authorized release date.



cc: [private], [private]


FAQ: Questions and Answers

[back to notice text]

Question: What is intellectual property?

Answer: Intellectual property consists of property created through human creativity. It includes, for example, literature, the visual arts, music, drama, compilations of useful information, computer programs, biotechnology, electronics, mechanics, chemistry, product design, and trade identity symbols. Intellectual property law is designed to promote human creativity without excessively restricting dissemination of the fruits of such creativity. Intellectual property rights are embodied in patents, trade secrets, copyrights, and trademarks.

[back to notice text]

Question: What can be kept as a trade secret?

Answer: A trade secret is information that provides a business with a competitive advantage. The following section provides examples of circumstances where trade secret protection was approved or denied. Courts have provided trade secret protection to formulas, patterns, plans, designs, physical devices, processes, software, and

[back to notice text]

Question: What do courts consider in determining if a trade secret exists?

Answer: Courts usually consider the following three factors in determining whether you have a trade secret:

(1) Is the information deemed to be a "trade secret" valuable to the business?
Only secret information can be protected by trade secret law. Secrecy is typically determined by evaluating whether or not the information is "generally known" or "readily ascertainable." If the information is secret, you must consider whether the secret information is valuable to your business. How would you rank its value? Courts tend to find that the information is a trade secret if the information is so valuable as to significantly impact the operations of a business.

(2) What steps have been taken to keep the information secret?
Trade secret laws require that you have taken some action to keep your information a secret. The security procedure taken to protect the information is often the most important evidence that the information constitutes a trade secret. For example, courts have often found that restricting access (on a "need to know" basis) to any sensitive information is a factor that helps to meet this requirement. Courts have also found that physical security, such as keeping written trade secret information in a locked drawer and granting very limited access to it, can meet this requirement. Generally, holders of trade secrets develop a formal system for safeguarding their trade secret information. Such a system can include, for example, reviewing information to be sure that the secret information is not included in documents sent to customers and competitors. In addition, proprietary notices can be placed on all documents containing information related to trade secrets and strict confidentiality provisions can be written into all consulting, manufacturing, employment, and/or non-disclosure agreements.

(3) To what extent do employees and others involved in the business know about the information? What about people outside the business?
The extent that those in your business and those outside the business have access to the information can affect a court's decision as to whether you have a legal trade secret. Generally, courts have found the information to be public knowledge and not a trade secret if people who do not have a need to know the information have access to it. This is especially true if many people outside the company are familiar with the information.

[back to notice text]

Question: How can I protect my trade secrets from disclosure by my employees?

Answer: There are two types of legal contracts that are widely used to help businesses protect trade secrets: (1) non-disclosure agreements; and (2) non-compete agreements. Often, these agreements are included as part of an "employee agreement' that is signed upon commencement of employment.


During the course of business, you may have to disclose your business secrets to your employees. What happens when you have a disloyal, untrustworthy, or dishonest employee and that employee knows your secrets? Is there anything you can do to stop the employee from telling others?

A non-disclosure agreement (NDA) is a confidentiality agreement that can be used to protect trade secrets. Often, during the regular course of business, your secret information may be disclosed to employees or business partners. An NDA requires that the information be kept a secret. The provisions of the agreement require the person to keep the information confidential. If someone has signed an NDA and uses your trade secret without your authorization, you can sue for damages and stop the violator.


During the regular course of business, you may have to disclose your business secrets to your employees. But what happens when these employees leave your company? By requiring your employees to sign a non-compete agreement, employees must agree not to work for a direct competitor for a certain amount of time after leaving your company. The theory behind this type of agreement is that after a certain amount of time, your trade secret will no longer be valuable because of technological changes as your business advances, and, accordingly, the technology will no longer need to be protected as a trade secret.

It is important to be aware that courts use a "rule of reason" in deciding whether a noncompete agreement is legal. In other words, the terms of a non-compete agreement must be reasonable as to the duration, territory, and scope of the activity. A restraint is generally enforceable if it is fairly designed to protect the employer

[back to notice text]

Question: What is copyright protection?

Answer: A copyright protects a literary, musical, dramatic, choreographic, pictoral or graphic, audiovisual, or architectural work, or a sound recording, from being reproduced without the permision of the copyright owner. 17 U.S.C.

[back to notice text]

Question: What may be copyrighted?

Answer: In order to be copyrightable, a work must be

1. fixed in a tangible medium of expression ; and
2. original.

Copyrights do not protect ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries: they only protect physical representations. 17 U.S.C.

[back to notice text]

Question: Does copyright protect facts?

Answer: No. Copyright protects only original expression, not discovered facts. Creative selection and arrangement of facts is protected, but you can take the basic facts and rearrange them without infringing copyright. Thus the publishers of a telephone book cannot sue an online phone book publisher for copyright infringement, even if it took the first publishers considerable effort to collect the listings.

[back to notice text]

Question: What is fair use?

Answer: Fair use is an affirmative defense that can be raised by an individual who is sued for copyright infringement (or an individual against whom a claim of copyright infringement is alleged). See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994). Once the plaintiff has proven that his or her copyright was infringed upon, the burden lies with the defendant who invokes the fair use defense to prove that her or his use of the copyrighted work of another should be legally permitted, notwithstanding the copyright owner's exclusive rights in her work.

[back to notice text]

Question: Do I need permission from the copyright holder to make fair use?

Answer: No. If your use is fair, it is not an infringement of copyright -- even if it is without the authorization of the copyright holder. Indeed, fair use is especially important to protect uses a copyright holder would not approve, such as criticism or parodies. See Campbell v. Acuff-Rose Music, 510 US 569 (1994).

[back to notice text]

Question: What does ?misappropriating? a trade secret mean?

Answer: One has ??misappropriated? a trade secret if he or she has acquired, disclosed, or used the trade secret information without the permission of the holder, where such activities were done through improper means (e.g., the trade secret information was stolen from the holder) or in breach of an obligation of confidentiality or non-use. If you have received a letter stating that you have ?misappropriated? a trade secret (see SAMPLE LETTERS; also see TRADE SECRET LAWS), you should consult with an attorney.

[back to notice text]

Question: What is third-party liability, also known as "secondary liability"?

Answer: The concept of third party liability refers, as the name implies, to situations in which responsibility for harm can be placed on a party in addition to the one that actually caused the injury. The most common example comes from tort law: a customer in a grocery store drops a bottle of wine and another customer slips on the puddle and injures himself; he may bring an action for negligence against the customer who dropped the bottle and against the owner of the grocery store. Under the common law doctrine of third-party liability, a plaintiff must show not only that an injury actually occurred, but also (in most cases) that some sort of connection existed between the third party and the person who actually caused the injury.

As such the concept of third-party liability is often divided into two different types: contributory infringement and vicarious liability. Typically, contributory infringement exists when the third party either assists in the commission of the act which causes the injury, or simply induces the primary party to do so commit the act which caused the injury. (See What is contributory infringement?.) Vicarious liability often requires the third party to have exerted some form of control over the primary party

[back to notice text]

Question: Does pre-notification mean anything?

Answer: Sometimes, claimants send C&Ds even before a website has posted anything, anticipating that it may soon post something objectionable. Putting the site-owner on notice of their claim, they may be trying to get the site-owner to filter user-posted material -- which there is no general legal obligation to do.

They may also try argue that the site-owner has knowledge of infringement if it later occurs, but if the content is user-posted, the DMCA safe-harbor applies until the host gets notice of the specific location of allegedly infringing activity.

They may be trying to establish a basic element of another claim, such as trade secret. To misappropriate a trade secret is to use or disclose it knowing that it was acquired through improper means.

Topic maintained by Santa Clara University School of Law High Tech Law Institute

Topic Frequently Asked Questions (and Answers)
Chilling Effects Clearinghouse -
disclaimer / privacy / about us & contacts