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What are Trade Secrets?

Trade secrets are information of any kind, including a formula, pattern, method, technique, or process, with two specific qualities. First, the information must have "independent economic value from not being generally known to the public." Second, the trade secret's owner must take "reasonable steps to maintain the secrecy of the information." A judge or jury would likely analyze this information, examining such factors as sensitivity, who needs access to the information, and whether employees of the company with the trade secrets were actually following internal procedures for protecting information. For more on what makes a trade secret, click here.

Sometimes, a disgruntled employee or former employee will 'steal' a company's trade secrets, referred to as trade secret misappropriation. Typically, former employees and direct competitors are the most likely misappropriators of trade secrets. Companies can protect themselves from trade secret misappropriation, which can ruin a business. For example, employment contracts should be updated to incorporate confidentiality agreements, non-solicitation provisions, and assignment of intellectual property.

Trade secret owners should also consider having a legal plan in place that provides internal steps that should be taken in the event a trade secret is threatened to be or actually misappropriated. Other steps, such as protecting information systems and reviewing human resources policies, are also key protective measures. For instance, securing networks by use of firewalls, passwords, and clear polices about electronic storage and email can safeguard trade secrets. Working with an Orange County IP law attorney can provide a strong level of protection against would-be thieves of intellectual property.

A variety of remedies exist for trade secret misappropriation. For immediate relief, the trade secret owner might seek an injunction. A court would order the defendant to cease his activity. Once harm occurs, a trade secret owner could seek damages for harm he or she suffered, such as loss of business. If the misappropriation was willful and malicious, the trade secret owner could seek punitive damages. The trade secret owner could also ask a court to order the defendant to pay a reasonable royalty for the time perio.

For more information on how to protect your business's intellectual property, including trade secrets, contact the experienced trade secret lawyers at Myers Berstein LLP today.

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