What Are Trade Secrets?

What are trade secrets?
A trade secret claim occurs when a defendant obtains or publishes a company’s trade secrets. The company may then file a lawsuit against the defendant for trade secret misappropriation. A trade secret is information not available to the public that confers a competitive business advantage on its owner by virtue of not being public to its competitors. When the defendant obtains a trade secret improperly, or publishes it, knowing that someone else acquired it improperly, the defendant has misappropriated the trade secret.

Trade secrets come in various forms. It may include formulas, plans, designs, patterns, supplier lists, customer lists, financial data, personnel information, physical devices, processes, and computer software.

Elements for Trade Secrets

The common three elements for trade secrets are:

• The information conveyed is secret and not open to the public. For information to be a secret, it must not be known by competitors.
• It confers a competitive advantage on its owner. The information gives its owner an economic advantage over its competitors.
• It is subject to reasonable efforts to maintain its secrecy. The owner of a trade secret must make reasonable efforts to keep the information secret.

Defenses for Trade Secrets

There are several defenses to trade secrets. One common defense is that what the defendant published was not a secret because it was already generally known or easily ascertainable to the public. Another defense is that the trade secret failed to generate any economic value to the defendant. If the defendant received no economic advantage over its competitors using the trade secret then it might be a defense to the tort. A third defense is that the plaintiff and owner of the secret did not take reasonable steps to maintain its secrecy. If the plaintiff failed to take any affirmative steps to protect the trade secret then the defendant may have a defense for using it.

Another defense is that the defendant did not commit misappropriation of the trade secret. If the defendant discovered the trade secret legally such as by independent invention or accidental disclosure it is not misappropriation.

Damages for Trade Secrets

If a court finds that a defendant has misappropriated a plaintiff’s trade secrets, it may impose a number of damages or remedies for the plaintiff. First, a court may award injunctive relief. A court may order a defendant to stop violating the plaintiff’s rights and to take steps to preserve the secrecy of the plaintiff’s information.

Second, a court can make a defendant pay money damages to the plaintiff for the economic harm suffered because of a trade secret violation. This may include the plaintiff’s losses resulting from the misappropriation and the defendant’s profits derived from it. In addition, a court may award royalty fees if the invention has been in the stream of commerce for a while.

The law of trade secrets is complex. If you believe that, you are a victim of the misappropriation of your trade secrets or your company’s trade secrets then contact the experienced attorneys at Meyers Roman Friedberg & Lewis, LPA to evaluate your case. The laws regarding trade secrets vary depending on the state. Call (216) 831-0042 today to find out more information.