Does Trade Secret Law apply to Videogames and Virtual Worlds?

The most important aspect of trade secret law from the standpoint of videogames and virtual worlds is the requirement that the information be treated in a way that can reasonably be expected to prevent its disclosure.   There are a number of factors that courts will consider, including, (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 involved in the business, (3) the extent of the measures undertaken by an employer to protect the secrecy of the information, (4) the value of the information to the employer, (5) the amount of effort or money expended by the employer in developing the information, and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Videogame and Virtual World companies use various levels of security including confidentiality agreements and data encryption methods to protect their information from disclosure to competitors.  Trade secrets may include novel aspects of upcoming games or may include more mundane items like contract terms and customer lists.  Regardless of their type, trade secrets are generally highly protected in the videogame and Virtual World industry.  That being said, the current nature of Virtual Worlds renders them poor forums for use of one wishes to maintain secrecy.  Although information could theoretically be communicated through a Virtual World using third-party encryption software, it rarely happens.  Nearly all communication in current Virtual Worlds is vulnerable to eavesdropping from the developer and other users, and is additionally stored on the servers of the provider for an indefinite period of time (theoretically available to any employee of the provider with sufficient security rights and interest).  Moreover, it is protected only by a generic privacy policy, not a specific non-disclosure agreement.  Therefore, if you are communicating trade secrets in a Virtual World, without some form of encryption or other specific security measures, it is likely that you would loose your protection.