Protecting Your Trade Secrets
I am intellectual property lawyer Larry Townsend. Since 1979, I have counseled or represented hundreds of individuals and businesses, everything from providing them a simple NDA (nondisclosure agreement) so they can keep their plans and ideas confidential when dealing with vendors, suppliers and contractors helping them launch their new business, to bringing and defending suits for misappropriation of trade secrets.
To discuss your specific matters or issues not listed below, please call my office in at 415-906-2792. I can assess your situation and determine the best way in which to proceed.
The Importance Of Trade Secret Protection
Your trade secrets allow your business to maintain its competitive edge. They safeguard your proprietary information and encourage innovation. They also allow you to cultivate a sense of trust between you and your business associates, including your clients or customers.
Protecting your trade secrets minimizes the risk that your competitors will access sensitive information – such as formulas, client lists and marketing strategies – which could cause your company financial loss or erode your market position. Effective protection makes it possible to promote trust in your business.
The Legal Framework Governing Trade Secrets
Trade secrets in the U.S. are protected under both federal and state laws. At the federal level, the Defend Trade Secrets Act (DTSA) of 2016 created a consistent legal standard, allowing companies to pursue civil claims for trade secret theft in federal courts.
At the state level, many states, including California, have adopted the Uniform Trade Secrets Act (UTSA) with some variations. In California, Civil Code Section 3426 governs trade secrets, offering specific definitions and remedies.
Understanding both federal and state frameworks helps businesses develop a robust, preemptive strategy to protect their confidential information and respond effectively to theft or misappropriation when it does happen. I offer the level of experience and skill that is necessary to understand the interplay between state and federal law.
Remedies For Trade Secret Misappropriation
If a trade secret is misappropriated, you can pursue several legal remedies, including:
- Injunctive relief: Courts may order the offending party to stop using or disclosing the trade secret to prevent further harm.
- Monetary damages: These include compensation for actual losses and unjust enrichment caused by the theft.
- Punitive damages: If the misappropriation was willful and malicious, courts may award additional damages to punish the offender.
- Attorney’s fees: In cases of bad faith litigation or intentional theft, the prevailing party may recover attorney’s fees, reducing the financial burden of legal action.
These remedies are essential to deter theft, ensure fair compensation and maintain business integrity. If your trade secrets have been misappropriated, I can help you understand the possible avenues of approach to the situation and what remedies are available.
I Have The Versatility To Protect Your Interests
I handle the following types of trade secret issues:
- Bringing or defending claims of misappropriation of trade secrets
- Employee theft of trade secrets
- Breach of confidentiality and/or nondisclosure agreements
- Trade secret protection measures
In California, trade secrets are defined in Civil Code Section 3426 as “information, including a formula, pattern, compilation, program, device, method, technique, or process that: derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
Trade Secret FAQs
Here a few of the trade secret questions I hear when meet with clients for the first time:
1. What qualifies as a trade secret?
A trade secret is any information that has economic value from not being generally known to the public and that has been the subject of reasonable efforts to maintain its secrecy. Trade secrets may include formulas, methods, recipes, programs, techniques, processes, customer lists, customer requirements, product specifications, and pricing strategies.
2. How does one protect trade secrets?
Unlike copyrights and trademarks which, to maximize protection, are registered in public registries, trade secrets, by definition, are not disclosed to the public. Their secrecy must be maintained. Best practices dictate that any number of actions be taken to ensure that trade secrets are kept secret, including 1) keeping materials (e.g., documents, digital files, and prototypes) in a secure place, 2) marking documents CONFIDENTIAL, 3) limiting access to need-to-know employees, and 4) having employees and third party contractors who may have access sign non-disclosure agreements.
3. How long does trade secret protection last?
Trade secret protection lasts as long as the information remains confidential and continues to provide economic value. Unlike patents, there is no fixed term for trade secret protection.
4. Did California adopt the Uniform Trade Secrets Act?
California adopted the Uniform Trade Secrets Act (UTSA) in 1984. The California Uniform Trade Secrets Act (CUTSA) is codified in the California Civil Code sections 3426 to 3426.11. This act provides legal protection for trade secrets and allows businesses to file lawsuits in state court if their trade secrets are misappropriated.
5. Does California allow “inevitable disclosure” doctrine?
The “inevitable disclosure” doctrine is a legal concept used in trade secret law. It allows an employer to prevent a former employee from working for a competitor if it is deemed that the employee will inevitably disclose trade secrets, even if the employee has not yet done so. California courts have consistently rejected this doctrine, emphasizing the state’s strong public policy favoring employee mobility and competition.
6. How does the DTSA impact trade secret protection?
It includes extraterritorial reach, a civil seizure provision and whistleblower protections. The DTSA complements state laws, allowing cases in federal or state courts. This act enhances trade secret protection with additional remedies and a cohesive legal framework. One unique feature of the DTSA is the civil seizure provision, which allows a court to order the seizure of property necessary to prevent the dissemination of trade secrets. This remedy is not available under most state laws.
Do you have questions about trade secrets?
To schedule a time to meet me, call my office at 415-906-2792 or complete this online contact form.