Scarinci Hollenbeck, LLC
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Author: Scarinci Hollenbeck, LLC
Date: March 5, 2020
The Firm
201-896-4100 info@sh-law.comWhile it may not be a super-secret recipe like Coca-Cola, which has been kept secret by the Coca-Cola Company since 1891, most businesses have valuable information that they want to safeguard from their competition. Examples include proprietary computer code, manufacturing processes, databases, and customer lists.
Trade secrets represent one of the most commonly misappropriated types of intellectual property because the information can often be so easily and quietly taken. Technology has also made it easier to steal trade secrets, with employees, contractors, vendors and other third-parties able to download, copy and transfer confidential information electronically.
In basic terms, a trade secret is proprietary information that is not generally known and provides a business with an economic advantage over competitors or customers. In order to obtain legal remedies, trade secret owners must also be able to demonstrate that they have taken reasonable measures to keep the information a secret. Unfortunately, state laws and the federal Defend Trade Secrets Act (DTSA) do not expressly define what types of reasonable measures a company must take.
The DTSA provides a wide range of legal remedies for companies that suffer trade secret theft. However, in order to prevail in a trade secret misappropriation case, one must be able to demonstrate that the stolen information satisfies the definition of a trade secret. That includes being able to show that one has taken sufficient measures to keep the information a secret.
While it may seem obvious, the failure to take any overt action to safeguard a purported trade secret will lead to dismissal of a trade secret lawsuit. It is also important to be able to show that a company treats its trade secrets with greater care than its general company information.
While courts will always examine the unique facts of each case, the following factors will often be taken into account:
It is important to note that taking some of the above steps does not guarantee that the court will view your information as a trade secret. In addition, there is no one-size-fits-all approach to trade secret protection. What is “reasonable” will vary based on the size of the company, the nature of the information, its value to the company, and other factors.
Companies must be proactive in safeguarding their trade secrets. If a company fails to do so, it may be unable to pursue legal remedies, even if valuable information is stolen. For assistance, we encourage you to consult with a member of the Scarinci Hollenbeck Intellectual Property Law Group.
If you have any questions or if you would like to discuss the matter further, please contact me, David Einhorn, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
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