Many business owners and employees can attest that trade secret litigation in California is not uncommon. There have been many cases where companies have sued former employees for starting their own businesses after stealing trade secrets.
Whether you are an employee being sued by a former employer or an employer protecting yourself from unlawful trade secret theft, it is important to understand the laws that govern this essential commercial regulation.
What exactly is a trade secret?
In California, a trade secret refers to “procedures, skills and other key information that gives a business a competitive advantage; derives independent economic merit from not being generally known by others and is not reasonably and independently ascertainable on one’s own.” Trade secret rights are not subject to filing requirements or legal fees.
The Uniform Trade Secrets Act refers to the theft of trade secrets as misappropriation. This act means that if you knowingly acquire trade secrets through improper means such as bribery, theft, misrepresentation, or breach of duty to maintain secrecy, you have committed misappropriation. Here are some of the protected trade secrets today:
- Manufacturing processes
- Research and development
- Secret ingredients or recipes
- Clients lists
- Future marketing plans
However, it is not illegal to discover a trade secret through independent means. For instance, you can legally uncover a trade secret for making a specific product through reverse engineering.
Remedies for misappropriation of trade secrets
Anyone found liable for misappropriation of trades secrets may face, among other things, having to pay damages, giving up any profits earned while using the trade secrets, an injunction, and payment of attorneys’ fees and costs.