Trade Secret Violation
Trade secrets and other confidential business information are generally protected by intellectual property law. A trade secret may consist of a formula, pattern, physical device, idea, process, or a compilation of information.
To be considered a trade secret, the information must have the following characteristics:
- The information provides the owner with a competitive advantage in the marketplace
- It is treated in a way that prevents the public or competitors from learning about it, absent improper acquisition or theft
Some of the basic examples of a trade secret may include a formula for a beverage or sports drink, a new invention for which a patent has not yet been filed, recipes, survey methods used by professional pollsters, marketing strategies, manufacturing techniques, and computer algorithms, among others.
But unlike patents, copyrights, and trademarks, trade secrecy is a do-it-yourself form of protection. One does not register with the government in order to secure a trade secret. You can only protect a trade secret by keeping the information confidential. Once the information is divulged or made available to the public, trade secret protection ends.
However, most states have laws prohibiting theft or disclosure of trade secrets, which is derived from the Uniform Trade Secrets Act (UTSA).
Typically, trade secrets may protect valuable technical information and it can also serve to:
- Protect ideas that offer a business competitive advantage
- Keep competitors from learning methods or ways about a product or service and from discovering it functional or technical attributes
- Protect marketing plans, price information, client lists and other valuable business information
- Protect other information learned during the course of research and development
A trade secret owner has rights to prevent other individuals from copying, using, or benefitting from its trade secrets or disclosing them to others without permission. These individuals may include the following groups of people:
- People bound by a duty of confidentiality not to disclose or use trade secret information such as employees who frequently comes into contact with the information as part of his job
- People who sign non-disclosure agreements
- People who acquire trade secrets through improper means such as theft, industrial espionage, or bribery
- Those who knowingly obtained trade secrets from people who have no right to disclose it
- People who learn about a trade secret by accident or mistake, but had reason to know that the information was a protected trade secret
To protect trade secrets, the owner has to take several precautionary measures to safeguard the information. These may include labeling trade secret documents as confidential, locking them up in a safe or vault, maintaining computer security, and giving access only to limited personnel.
The best way to protect secret is through the use nondisclosure agreements. Requiring employees to sign this agreement is one of the most important ways to maintain secrecy of confidential information and preventing it from being used by other individuals to their advantage.
In cases involving trade secret violations, an owner can enforce his rights against the person who stole confidential information by asking the court to issue an order preventing the use or further disclosure of the secret.
To prevail in a trade secret violation or infringement suit, a trade owner must show the following:
- That the confidential information allegedly stolen or illegally acquired, provides a competitive advantage
- That the information was improperly acquired or improperly disclosed
- That the information is maintained in secrecy
Pursuing a claim against trade secret violation or infringement issue may involve complex federal and state laws, which would require the assistance of a knowledgeable intellectual property lawyer.
Business and Corporate Attorney is experienced in handling cases involving intellectual property such as trade secret violation. We can also assist you in the drafting and preparation of vital business documents such as nondisclosure agreements.
Call us at our toll-free number and avail of our free case analysis.