Can a compilation of public information constitute a trade secret? USAPower v. PacifiCorp Explained

In USAPower v. PacifiCorp, the Utah Supreme Court addressed whether a compilation of publicly available information could constitute a trade secret and clarified the standards for controvering facts in summary judgment proceedings.

Background and Facts

USAPower developed the Spring Canyon power plant project in Mona, Utah, accumulating various assets and preparing detailed development plans. During negotiations with PacifiCorp, USAPower disclosed confidential information under a nondisclosure agreement. PacifiCorp subsequently decided not to purchase Spring Canyon and instead built its own similar Currant Creek plant. USAPower also discovered that its water law attorney, Jody Williams, had begun representing PacifiCorp while still representing USAPower, creating a potential conflict of interest.

Key Legal Issues

The court addressed three primary issues: (1) whether USAPower properly controverted PacifiCorp’s factual statements under Rule 7(c)(3)(A), (2) whether a compilation of public information could constitute a trade secret, and (3) whether circumstantial evidence could establish misappropriation and breach of fiduciary duties.

Court’s Analysis and Holding

The court held that parties may controvert factual statements by presenting contrary inferences, even when the underlying facts are undisputed. Significantly, the court ruled that “a unique combination of generally known elements or steps can qualify as a trade secret, if it represents a valuable contribution attributable to the independent efforts of the one claiming to have conceived it.” The court applied the six-factor test from Restatement of Torts § 757 for determining trade secret status. Additionally, the court confirmed that circumstantial evidence showing access and similarity can establish misappropriation and breach of confidentiality claims.

Practice Implications

This decision provides important guidance for protecting proprietary information that combines public elements. Practitioners should document how their compilation creates unique value beyond its individual components. When responding to summary judgment motions, attorneys must present specific contrary inferences rather than merely disputing the implications of facts. The ruling also reinforces that simultaneous adverse representation creates genuine issues of material fact regarding disclosure and breach of fiduciary duties, even without direct evidence.