Ark. Code Ann. § 4-75-601 (2026)

Research References

ALR.

Applicability of Inevitable Disclosure Doctrine Barring Employment of Competitor's Former Employee. 36 A.L.R.6th 537.

Ark. L. Rev.

Carroll, Uniform Laws in Arkansas, 52 Ark. L. Rev. 313.

Cate, Saforo & Associates, Inc. v. Porocel Corp.: The Failure of the Uniform Trade Secrets Act to Clarify the Doubtful and Confused Status of Common Law Trade Secret Principles, 53 Ark. L. Rev. 687.

U. Ark. Little Rock L. Rev.

Annual Survey of Caselaw, Business Law, 24 U. Ark. Little Rock L. Rev. 883.

Note: Intellectual Property-Trade Secret Law-Is the Arkansas Supreme Court Following Other Jurisdictions Down the Wrong Road in Analyzing Combination Trade Secrets? Wal-Mart Stores v. P.O. Mkt., 347 Ark. 651, 66 S.W.3d 620 (2002), 25 U. Ark. Little Rock L. Rev. 407.

Annual Survey of Caselaw, Intellectual Property, 25 U. Ark. Little Rock L. Rev. 1014, 1016.

Case Notes

In General.

The distinction between information which is written down and that which is memorized has little materiality under Arkansas law; the critical issue is whether the information, whether written or memorized, is entitled to protection as a trade secret. Vigoro Indus., Inc. v. Cleveland Chem. Co., 866 F. Supp. 1150 (E.D. Ark. 1994), aff'd in part, reversed in part, Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996).

Cause of action for misappropriation of a trade secret accrued when the trade secrets were acquired; thus, the statute of limitations began to run in January 1999, when defendant started his new business with the knowledge of having worked at plaintiff's business and induced plaintiff's employees and customers to leave plaintiff's business. Quality Optical of Jonesboro, Inc. v. Trusty Optical, L.L.C., 365 Ark. 106, 225 S.W.3d 369 (2006).

In a nursing care services provider's suit against a competing company, a damages award in favor of the provider was proper as the fair market value of the misappropriated trade secrets was an appropriate measure of unjust enrichment for purposes of the Arkansas Trade Secrets Act, §§ 4-75-601 — 4-75-607, and these trade secrets (the provider's computer program and databases) benefitted the competitor in its first-year's profits. The development and labor costs for the various lists and databases were properly calculated for unjust-enrichment damages as the competitor did not have to contribute to the time, effort, and cost of their development. R.K. Enters., LLC v. Pro-Comp Mgmt., 372 Ark. 199, 272 S.W.3d 85 (2008).

Applicability.

Where invention or its components, together or singly, were either generally known by virtue of extant patents or readily ascertainable, by proper means contrary to the requirement of subdivision (4)(A), and where plaintiff further failed to demonstrate that it took reasonable, if any, efforts to maintain any secrecy on the subject matter as required by subdivision (4)(B), the evidence failed, as a matter of law, to prompt application of the Arkansas Trade Secrets Act. Coenco, Inc. v. Coenco Sales, Inc., 940 F.2d 1176 (8th Cir. 1991).

Section 4-75-602 applied where plaintiff's tort claims of conversion and conspiracy stemmed from the same acts constituting a violation of the Arkansas Trade Secrets Act, § 4-75-601 et seq.; thus, the statutory language of the Act displaced or preempted the award of damages based upon plaintiff's tort claims for conversion of trade secrets, as well as other tort claims such as conspiracy, that might have arisen under a claim for misappropriation of trade secrets, and the trial court committed reversible error in its award of damages based on tort law, for tortious conversion and conspiracy. R.K. Enter., L.L.C. v. Pro-Comp Mgmt., 356 Ark. 565, 158 S.W.3d 685 (2004).

Defendants were not entitled to a protective order because defendants' bald assertion that certain phone records constituted trade secrets under § 4-75-601(4) failed to satisfy defendants' burden to show that the records contained the type of sensitive information that would merit protection under Fed. R. Civ. P. 26(c)(7). Rotoworks Int'l Ltd. v. Grassworks USA, LLC, — F. Supp. 2d —, 2007 U.S. Dist. LEXIS 27097 (W.D. Ark. Apr. 11, 2007).

Determinative Factors.

An important factor in determining whether a customer list was a trade secret is whether the employer took actions to guard the secrecy or preserve the confidentiality of the list. Whether the customer information used was written down or memorized is immaterial. Allen v. Johar, Inc., 308 Ark. 45, 823 S.W.2d 824 (1992).

In determining whether any particular information constitutes a trade secret, several statutory factors must be analyzed: first, it must be determined if the information has economic value from not being generally known; then, it must be determined whether the information was not generally known; next, it must be determined whether the information was “readily ascertainable by proper means”; and finally, the court must ascertain whether the information was subject to reasonable efforts to maintain its secrecy. Vigoro Indus., Inc. v. Cleveland Chem. Co., 866 F. Supp. 1150 (E.D. Ark. 1994), aff'd in part, reversed in part, Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996).

The issue of whether information constitutes a trade secret under the Arkansas Trade Secrets Act is governed by six factors: 1) the extent to which the information is known outside the business; 2) the extent to which the information is known by employees and others in the business; 3) the extent of measures taken to guard the secrecy of the information; 4) the value of the information to the party and competitors; 5) the amount of money or effort expended by the party in developing the information; and 6) the ease or difficulty with which the information could be properly acquired by others. Wal-Mart Stores v. P.O. Mkt., Inc., 347 Ark. 651, 66 S.W.3d 620 (2002).

Generally Known.

Appellee claimed that the mere fact that appellant's formulas were capable of being reverse engineered made them generally known to, and readily ascertainable by, third persons; however, a formula or product may maintain its status as a trade secret, even though it can be reverse engineered, if the process of reverse engineering is too difficult or costly, and a fact question remained as to the cost or difficulty of reverse engineering the formulas; therefore, summary judgment was improper. Gibraltar Lubricating Servs. v. Pinnacle Resources, Inc., 2016 Ark. App. 156, 486 S.W.3d 224 (2016).

Appellee pointed to publications and patents attached to an expert's affidavit as evidence that the ingredients in appellant's formulas were generally known, but none of those items purported to contain the actual formulas of appellant, and there was testimony that appellant's lubricants had years of proven success and the formulation of the additive package was considered a trade secret; summary judgment was improper. Gibraltar Lubricating Servs. v. Pinnacle Resources, Inc., 2016 Ark. App. 156, 486 S.W.3d 224 (2016).

Information Not Protected.

The following types of customer information, belonging to a farm products supplier, were not protectable as trade secrets under this subchapter: the fact that the farmer was a customer of the supplier; the farmer's history of crops planted, timing of planting, crop rotation schedule, and plans for future planting; the history of supplier's product sales to the farmer; the farmer's history of having his crop scouted for insects by supplier's salesmen; the farmer's history of having soil samples analyzed at supplier's expense; and the farmer's creditworthiness for farm-supply purchases. Vigoro Indus., Inc. v. Cleveland Chem. Co., 866 F. Supp. 1150 (E.D. Ark. 1994), aff'd in part, reversed in part, Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996).

Identity of farm supply store customers was not entitled to trade secret protection because it could be easily discovered as they farmed in small geographic area; interested farmers would readily provide other types of information because that helped them purchase the most appropriate farm supplies. Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996), rehearing denied, Vigoro Indus. v. Cleveland Chem., — F.3d —, 1996 U.S. App. LEXIS 14845 (8th Cir. June 17, 1996).

Information at issue did not qualify as a trade secret where there were no efforts on the plaintiff's part to restrain disclosure of information postemployment, such as with a noncompetition agreement. ConAgra Poultry Co. v. Tyson Foods, Inc., 342 Ark. 672, 30 S.W.3d 725 (2000).

A plan to have a separate company bill large bulk credit buyers' of retailer's goods and earn the credit markup of the cost of the retailer's goods was not a trade secret in that, even with looking at the combination of ideas instead of the ideas individually, the concept was not unique. Wal-Mart Stores v. P.O. Mkt., Inc., 347 Ark. 651, 66 S.W.3d 620 (2002).

Employer's proprietary information was not a trade secret when it was either available on the internet or in hard copy or readily available to employees, and the secrecy of its software was compromised by frequently allowing access to it without the use of a password known only to the employer. Weigh Sys. S., Inc. v. Mark's Scales & Equip., Inc., 347 Ark. 868, 68 S.W.3d 299 (2002).

Food corporation's nutrient profile was not a trade secret because hundreds of managers were educated about the profile and there was no proof that the corporation took any steps to swear them to secrecy or warn them of the confidential nature of the profile; relying on an ethical guide like the Corporate Code which failed to identify what was a trade secret, or to mention the nutrient profile, was not enough for the corporation to invoke trade-secret protection. Tyson Foods, Inc. v. ConAgra, Inc., 349 Ark. 469, 79 S.W.3d 326 (2002).

Telephone records that defendants wanted to make subject to a Fed. R. Civ. P. 26(c)(7) protective order were not trade secrets as defined in § 4-75-601(4) because they were simply a list of customer telephone numbers, with the dates and times of various phone calls noted. The records did not contain any unique information about the customers that was difficult to ascertain. Rotoworks Int'l Limited v. Grassworks USA, LLC, — F. Supp. 2d —, 2007 U.S. Dist. LEXIS 30713 (W.D. Ark. Apr. 25, 2007).

Information Protected.

Evidence clearly established that defendant's machines fit under the definition of trade secret. Allen v. Johar, Inc., 308 Ark. 45, 823 S.W.2d 824 (1992).

This subchapter may, to a limited extent, be applied to prevent an attorney from breaching confidentiality agreements with a non-client in order to use information obtained from such agreements to establish a class action lawsuit against the non-client. Southwestern Energy Co. v. Eickenhorst, 955 F. Supp. 1078 (W.D. Ark. 1997), aff'd, 175 F.3d 1025 (8th Cir. 1999).

A trucking company's methods, processes, operations, marketing programs, computer programs, future plans, and customers, encompassed confidential information and were protected by the Trade Secrets Act. Cardinal Freight Carriers, Inc. v. J.B. Hunt Transp. Servs., Inc., 336 Ark. 143, 987 S.W.2d 642 (1999).

A wash water system used in processing a raw material referred to as “Bayer Scale” constituted a trade secret where (1) although the system was a combination of components, each of which was in the public domain, the unified process afforded a competitive advantage, (2) the system was not generally known to either the plaintiff's or defendant's employees, (3) the plaintiff employed reasonable security measures to guard the configuration of the system, (4) the value of the system was its efficiency and inexpensive installation, (5) the engineer who designed the system spent some weeks on the problem solved by the system, and (6) no witness testified that he had ever seen Bayer Scale washed in a similar fashion. Saforo & Assocs. v. Porocel Corp., 337 Ark. 553, 991 S.W.2d 117 (1999).

Where a former employer alleged that a former employee copied trade secrets and solicited the former employer's clients to move their business to the current employer, and the former employer was granted a preliminary injunction based on nondisclosure and noncompetition provisions, although it would have been appropriate for the circuit court to enjoin the employee and the current employer under the Arkansas Trade Secrets Act also because the former employer's customer information came within the protection of the Act, this was a matter of discretion for the circuit court and the relief obtained would have been no broader. Freeman v. Brown Hiller, Inc., 102 Ark. App. 76, 281 S.W.3d 749 (2008), rehearing denied, — Ark. App. —, — S.W.3d —, 2008 Ark. App. LEXIS 361 (May 7, 2008), review denied, — Ark. —, — S.W.3d —, 2008 Ark. LEXIS 584 (Sept. 4, 2008).

Jury could reasonably have concluded that a company division's customer, pricing, ongoing project, and profit information, which appeared in a new firm's business plan, met the necessary criteria of a trade secret, as the information possessed independent economic value from not being known to or readily ascertainable by a competitor, as shown by the testimony of those who financed the new business; the company's president testified that a competitor could “kill our entire company” with that type of information. Bradshaw v. Alpha Packaging, Inc., 2010 Ark. App. 659, 379 S.W.3d 536 (2010), review denied, — Ark. —, — S.W.3d —, 2011 Ark. LEXIS 387 (Ark. Apr. 21, 2011).

Trial court properly granted a corporation a preliminary injunction to prevent an employee from using or disclosing trade secrets because it did not clearly err in finding that, as a director and an officer, the employee had a fiduciary duty to the corporation, and it did not abuse its discretion in finding the requisite irreparable harm and likelihood of success on the merits; the confidential information constituted trade secrets for the closely held corporation with few employees. LaPointe v. New Tech., Inc., 2014 Ark. App. 346, 437 S.W.3d 126 (2014).

Misappropriation.

The test of whether the “improper acquisition” and “disclosure” aspects of the definition of misappropriation are met is inherently different from that of “use.” Southwestern Energy Co. v. Eickenhorst, 955 F. Supp. 1078 (W.D. Ark. 1997), aff'd, 175 F.3d 1025 (8th Cir. 1999).Use of a misappropriated trade secret gives rise to liability under subdivision (2)(B) of this section. Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).

Trial court properly determined that a company was liable for the misappropriation of trade secrets where it used the illegally obtained trade secrets and benefitted from the appropriation. Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).

Defendants' motion to dismiss plaintiffs' claims for trade secret misappropriation under this section, intentional interference with contractual relationships or business expectancies, fraud, unjust enrichment, and civil conspiracy was denied because there were fact issues as to whether plaintiffs' claims accrued within the applicable three-year statute of limitations set forth in § 4-75-603 and § 16-56-105 and whether the application of the doctrine of fraudulent concealment was appropriate, and further, plaintiffs' allegations were sufficient to withstand a motion to dismiss. Roach Mfg. Corp. v. Northstar Indus., 630 F. Supp. 2d 1004 (E.D. Ark. 2009).

It was error to dismiss a firm's trade secrets claim because (1) it was alleged that an employer used the firm's trade secrets acquired by the employer's employee's brother to compete with the firm, and (2) misappropriation included use of a trade secret acquired by another. Ballard Group, Inc. v. BP Lubricants USA, Inc., 2014 Ark. 276, 436 S.W.3d 445 (2014).

In a trade secrets action, brought by a foam producer against a former customer/competitor, after a consultant and manager left the producer and helped the competitor develop its own foam, there was a material factual dispute as to whether the competitor used “improper means” to acquire the producer's trade secrets; there was a reasonable inference that the competitor used information from the consultant and manager that it knew they had a duty not to disclose. 3A Composites USA, Inc. v. United Indus., No. 5:14-CV-5147, 2015 U.S. Dist. LEXIS 122745 (W.D. Ark. Sept. 15, 2015).

Jury's award of $2,788,690 in damages for a retailer's misappropriation of trade secret source files was significantly reduced; although sufficient evidence at trial supported the jury's finding that the source files met the statutory definition of “trade secret” and that they were misappropriated, there was no evidence at trial that the source files actually played any role in any other firms' work for the retailer. Wal-Mart Stores, Inc. v. Cuker Interactive, LLC, No. 5:14-CV-5262, 2018 U.S. Dist. LEXIS 55242 (W.D. Ark. Mar. 31, 2018).

Preemption.

Not all claims asserted against a former employee were preempted by the Arkansas Trade Secrets Act; as to a tortious interference claim, an amended complaint alleged that, in addition to a theft of information, former clients were contacted to solicit their business. Moreover, an allegation that confidential information was deleted fell within the definition of criminal trespass, which was not based on misappropriation of a trade secret. Jenkins v. APS Ins., LLC, 2013 Ark. App. 746, 431 S.W.3d 356 (2013).

Readily Ascertainable.

The plaintiff's customer information was “readily ascertainable” and thus not trade secrets within the definition set forth in subdivision (4) of this section. Hi-Line Elec. Co. v. Moore, 775 F.2d 996 (8th Cir. 1985).

It is not necessary that employer's customer information be capable of exact and precise duplication in order to be readily ascertainable, especially in a market where customers do business with more than one sales company or are open to the possibility of shifting business from one company to another. Vigoro Indus., Inc. v. Cleveland Chem. Co., 866 F. Supp. 1150 (E.D. Ark. 1994), aff'd in part, reversed in part, Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996).

A finding that the information was readily accessible to competitors indicated that the plaintiff did not reasonably spend a great deal of time or effort compiling that information, and that the plaintiff suffered no injury when a former employee used the information since he or his new employer could easily discover it from other sources. Vigoro Indus., Inc. v. Cleveland Chem. Co., 866 F. Supp. 1150 (E.D. Ark. 1994), aff'd in part, reversed in part, Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996).

Where employer's customer list consisted of fewer than 200 farmers, all of whom were located within a twenty-five to fifty-mile radius of the store, the names of these farmers were “readily ascertainable.” Vigoro Indus., Inc. v. Cleveland Chem. Co., 866 F. Supp. 1150 (E.D. Ark. 1994), aff'd in part, reversed in part, Vigoro Indus., Inc. v. Crisp, 82 F.3d 785 (8th Cir. 1996).

A trucking company's methods, processes, operations, marketing programs, computer programs, future plans, and customers were not readily ascertainable where the company's employees signed a confidentiality agreement, passwords and pass codes were issued to employees who were privy to such information, and only two specific employees were allowed to talk to the media. Cardinal Freight Carriers, Inc. v. J.B. Hunt Transp. Servs., Inc., 336 Ark. 143, 987 S.W.2d 642 (1999).

Remedy.

In a case where it was alleged that an employee took electronic business data from an employer, the Arkansas Theft of Trade Secrets Act preempted a tort claim for the conversion of electronic data; the Act was the exclusive remedy for the alleged misappropriation of trade secrets. Infinity Headwear & Apparel, LLC v. Coughlin, 2014 Ark. App. 609, 447 S.W.3d 139 (2014).

Summary Judgment.

In this trade secrets case, the issue was whether appellant's formulas were readily ascertainable, such that they did not qualify as trade secrets; as the circuit court placed significant weight on appellee's expert's credibility, summary judgment was improperly granted. Gibraltar Lubricating Servs. v. Pinnacle Resources, Inc., 2016 Ark. App. 156, 486 S.W.3d 224 (2016).

Trade Secret.

There was insufficient evidence to support the jury's finding that a website contractor undertook reasonable efforts to maintain the secrecy of its Phased Release Support Technique, CMS Tweak Development Tool, and Zoning Tools as required by the definition of “trade secret” in this section. The jury's verdict was reversed as to those three alleged trade secrets. Wal-Mart Stores, Inc. v. Cuker Interactive, LLC, No. 5:14-CV-5262, 2018 U.S. Dist. LEXIS 55242 (W.D. Ark. Mar. 31, 2018).

Supplier did not undertake reasonable efforts to maintain the secrecy of three of the four alleged trade secrets from a buyer because the supplier never told the buyer that the technologies at issue were trade secrets and its broad declaration that everything except 13 specific templates was its exclusive property was insufficient to identify the techniques as trade secrets under Arkansas law. Walmart Inc. v. Cuker Interactive, LLC, 949 F.3d 1101 (8th Cir. 2020).

Where the buyer knew that the supplier's source files contained confidential materials and trade secrets, and the supplier took steps to protect them and did not acquiesce to the buyer's demands for them until compelled to do so, this was sufficient to identify the techniques as trade secrets under Arkansas law. Walmart Inc. v. Cuker Interactive, LLC, 949 F.3d 1101 (8th Cir. 2020).

Cited: United Centrifugal Pumps v. Cusimano, 708 F. Supp. 1038 (W.D. Ark. 1988); Swink v. Griffin, 333 Ark. 400, 970 S.W.2d 207 (1998); Statco Wireless, L.L.C. v. Southwestern Bell Wireless, L.L.C., 80 Ark. App. 284, 95 S.W.3d 13 (2003); Pro-Comp Mgmt. v. R.K. Enters., LLC, 365 Ark. 111, 225 S.W.3d 389 (2006).