Law and Business

Between James Bond’s brand of espionage and the emotional reaction when someone trained and trusted leaves and goes to work in competition lie most fact situations that give rise to trade secret disputes. These wrongs and their subjects overlap legal disciplines of intellectual property, employment and unfair competition.

Assume a Trade Secrets Case – How Should The Business Prepare?

There are three categories of trade secrets case. One is the tort action for the protection of the owner of a trade secret for unlawful appropriation. Second is an action brought by employers against employees to prevent disclosure to others. These actions are based upon either a confidential relationship or a restrictive covenant. Third is an action based on a contract involving the use of the trade secret.

The Uniform Trade Secret Act (USTA) typically pre-empts other tort actions arising under trade secret facts. Winning a UTSA case is enhanced if facts surrounding events prior to the tort establish the basis for the action. The trade secret plaintiff must prove (1) the existence of a trade secret and (2) the misappropriation.

These two elements are deceptively simple. The UTSA requires a “trade secret” to be: (1) sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and (2) the subject of efforts that are reasonable to maintain its secrecy or confidentiality.

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