Protecting Your Trade Secrets Through Litigation
The legal practice area of intellectual property (“IP”) and trade secrets protection is extremely complex. The laws and courts try to strike a balance between enabling a company to exploit its strong market advantage, while encouraging free enterprise and healthy competition.
Intellectual Property Protections In California
California has adopted the Uniform Trade Secrets Act, which defines trade secrets and generally preempts other claims related to the theft of trade secrets. When a business proves a competitor, or former employee violated the Uniform Trade Secrets Act, that business may be entitled to substantial damages, including the disgorgement of profits, exemplary damages, and the recovery of attorneys’ fees. Trade secrets misappropriation is generally defined as acquiring and using another’s trade secrets by improper means ( e.g., theft, misrepresentation, or breach of a duty to maintain secrecy).
When employees leave their employment, trade secrets issues arise when they solicit business from their former employer’s customers. Whether such solicitation is prohibited by law is almost always fact-specific. An attorney experienced in trade secrets can identify what rights the former employer has against both the former employee and their new employer.
Former employees are usually free to compete with their former employers even if the competition harms the former employer, so long as the competition is fair and not the result of using the former employer’s trade secrets, or other confidential information. Klein & Wilson‘s experienced attorneys can help former employees and their new employers make sure they do not cross the line in competing with a former employer. When that line is crossed, Klein & Wilson‘s attorneys can help a former employer minimize the damage caused by dishonest former employees who stole trade secrets, or other confidential information.
Understanding What Constitutes A Trade Secret
Not all confidential information is a trade secret. It takes experienced intellectual property lawyers to understand where courts draw the line. As the law in this complex area develops, that line can move back and forth as new cases are decided.
A trade secret can consist of any formula, process, pattern, idea, physical device, or compilation of information that gives a person, or company a competitive edge in the marketplace. Examples of assets and processes typically protected as trade secrets include the following:
- Formulas and recipes
- Marketing strategies
- Manufacturing techniques and processes
- Computer algorithms
- Compilations of confidential and complex information
- Customer lists
The only difference between two competing companies might be secrets one company knows and the other does not. For major brands, it is possible that millions of dollars in sales ride on the protection of unique processes and procedures. If that trade secret is stolen, its owner could lose substantial sales and profits, or see its brand damaged by the inferior practices of unscrupulous competitors.
Protecting Trade Secrets
Unlike patents, trademarks, and copyrights, trade secrets are not registered with any government office. All you must do to enjoy protection of your trade secrets is to take reasonable precautions to protect the confidentiality of your trade secrets. This might mean locking the trade secrets in a vault, or password protecting any computers where that valuable data is stored. Non-disclosure and non-compete agreements can help enforce confidentiality by employees and others who know your trade secrets, but these agreements must be carefully worded with reasonable terms.
While IP protections enable California companies to thrive and strengthen their brands, defending IP rights and enforcing IP protections can be extremely difficult. Since each instance of infringement can be subject to legal interpretation and opinion, it is extremely advantageous to hire a law firm, like Klein & Wilson, with experience prosecuting trade secrets cases. Attorneys Gerald A. Klein, Mark B. Wilson, and Michael S. LeBoff are experienced IP trial lawyers who understand the fine points of IP law and how to win trade secrets cases before judges and juries.