Safeguarding Trade Secrets and Proprietary Information

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Most states, including Maine, have statutes protecting trade secrets.  These statutes provide an important measure of protection to employers wishing to safeguard their proprietary information.   For employers, the issue of trade secrets often arises when an employee leaves to join a competitor or strike out on their own.  The concern is that, upon leaving, the employee will abscond with the employer’s information and use or disclose the information without the employer’s consent.  To help prevent this kind of misappropriation, employers should be sure that they have adequate policies in place governing the treatment of trade secret information.

As a case in point, in Dana Limited v. American Axle and Manufacturing Holdings (W.D. Mich. 2013), an employer sued two employees who had left to join a competitor.  Prior to leaving, the employees downloaded several of the employer’s files onto their personal computers and storage devices.  The employer claimed, among other things, that the employees misappropriated its trade secrets by downloading the files onto their devices.

The court disagreed, however, and found that there was insufficient evidence to show that the employees acquired the employer’s files through improper means.  In reaching this conclusion, the court noted that the employer did not have a policy that prohibited employees from storing company information on personal computers and storage devices.  Because there was no such prohibition, the employer could not show that the employees acquired the information through either theft, bribery, misrepresentation, or some other improper means.

Although the Dana case highlights the importance of having established policies in the first place, it also serves as a useful reminder to periodically review them to ensure they are up to date.

Topics:  Misappropriation, Trade Secrets

Published In: Intellectual Property Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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