Los Angeles trade secret lawyers understand how important confidential information can be to a company because it often involves valuable intellectual property. Trade secrets differ from other types of intellectual property such as copyrights, trademarks, and patents because they are not disclosed to the public. A famous example of a protected trade secret is the formula for Coca-Cola. Formulas, recipes, client lists, and other types of information can give businesses a significant advantage over competitors in the marketplace. When that proprietary information is unlawfully taken, it can have severe financial consequences. Time is of the essence in these cases, so it’s extremely important that you act quickly if you suspect that your trade secrets have been misappropriated in any way and could soon be disclosed, or if they have already been disclosed.
The California intellectual property attorneys at Tauler Smith LLP represent business clients in trade secret disputes, and we are prepared to take aggressive legal action to protect your trade secrets. Contact us today to discuss your case.
What Is California’s Trade Secrets Law?
There are both federal and state laws that can provide the basis for a trade secrets lawsuit in California:
Defend Trade Secrets Act
Federal law protects individuals and businesses against theft of trade secrets for products or services used in interstate commerce. The Defend Trade Secrets Act provides you with an avenue for getting an injunction and pursuing damages by filing a claim in U.S. District Court when someone has misappropriated your trade secrets. This may be an option even if the defendant is located in a foreign country. (An individual accused of stealing trade secrets for use by a foreign agent could also face criminal charges under the Economic Espionage Act of 1996.)
Uniform Trade Secrets Act
In addition to the main federal trade secrets law, there is another statute that explicitly protects against trade secret misappropriation in California and other states. The trade secret law, known as the Uniform Trade Secrets Act (UTSA), was created by the Uniform Law Commission and has been adopted by several states. In California, the law is codified in Cal. Civil Code Section 3426, and it specifies that companies are afforded protection for certain information that has value. This means that former employees who steal or misappropriate protected data may be subject to a civil lawsuit.
What Is a Trade Secret?
Trade secrets are a unique type of intellectual property. Trade secrets differ from other types of intellectual property such as copyrights, trademarks, and patents because they involve information that is not disclosed to the public. By contrast, copyrights, trademarks, and patents are typically registered with a federal agency. Trade secrets also have an advantage over copyrights, trademarks, and patents because trade secrets never expire.
The first step to winning a trade secret claim under California law is to establish that the information is, in fact, a trade secret. Information may be considered a trade secret if all of the following are true:
- The information is not known by anyone outside the business.
- The business has made reasonable efforts to maintain the information’s confidentiality.
- The information cannot be easily acquired or duplicated by others.
- The information carries independent economic value from not being known to others.
Common examples of trade secrets in the context of the Uniform Trade Secrets Act include formulas or recipes, unpatented inventions, manufacturing processes, computer software or source code, client or customer lists, business and marketing strategies, pricing information and sales forecasts, and spreadsheets or other data.
How Does an Employee “Misappropriate” Trade Secrets?
The second element that the plaintiff in a trade secret claim must prove is that the information was misappropriated. The Uniform Trade Secrets Act (UTSA) stipulates that “misappropriation of a trade secret” occurs when someone acquires, uses, or discloses secret information without consent of the business:
- Acquisition: The unauthorized acquisition of a trade secret through improper or illegal means is a violation of the UTSA. For example, a non-essential employee who does not ordinarily have access to certain company documents or data may not be allowed to obtain that information under any circumstances.
- Use: When an employee or a former employee uses secret information in a way that they are not authorized to do, this may be a violation of the UTSA. Many trade secret cases involve an ex-employee using confidential client lists to solicit clients for a new employer. Since the UTSA prohibits the use or disclosure of trade secret information, the use of confidential information to acquire clients is typically considered a clear violation of California trade secret law. California law also bars companies from using misappropriated trade secrets even if they did not know that the information was unlawfully acquired.
- Disclosure: The unauthorized use or disclosure of a trade secret does not have to be intentional to constitute a violation of the UTSA. If the former employee accidentally or inadvertently disclosed the information, the company may be able to file a civil suit against them.
What Remedies Are Available in a California Trade Secret Lawsuit?
When your proprietary trade secrets are taken without authorization and leaked to a rival company, the financial consequences can be dire. The good news is that you do have legal recourse in the form of a civil suit under both federal and California law. If you win your trade secrets claim, several remedies may be available. The first remedy in trade secret litigation is typically a permanent injunction, which is issued by the court and requires the defendant to stop using or disclosing the trade secrets.
The other remedies available to a plaintiff in a trade secrets claim are monetary. Depending on the circumstances of the case, the court could order the defendant to compensate you for any actual monetary losses you suffered because of the trade secret misappropriation. Additionally, the defendant may be ordered to pay you any profits they realized from the trade secret theft, or to offset their own unjust enrichment from the misappropriated trade secrets. Beyond that, the court could order the payment of punitive damages if the defendant’s conduct was particularly egregious and involved willful and malicious actions. In these cases, the plaintiff might also be eligible to recover attorney’s fees from the defendant.
Los Angeles Trade Secret Attorneys Help Businesses Protect Proprietary Information
The Los Angeles intellectual property lawyers at Tauler Smith LLP represent television and cable companies, software publishers, pharmaceutical companies, toy companies, and other retail manufacturers in trade secret cases that may require legal action. We also help companies to be proactive and avoid litigation by counseling them on the best ways to protect trade secrets from the very beginning when they hire workers. This may include implementing policies that restrict access to certain information, as well as preparing confidentiality or non-disclosure agreements (NDAs) that prohibit employees from stealing or disclosing proprietary information if they ever leave the company.
The Tauler Smith litigation team has brought and defended trade secrets cases in state and federal courts in California and Texas. We understand the unique nexus between intellectual property law and business law in these cases, so we know exactly what is needed to win a trade secret dispute at trial. There is a statute of limitations for bringing trade secret claims in California, which is why you need to act with some urgency if you suspect that misappropriation has occurred.
Defending Former Employees Against Allegations of Trade Secret Theft
If you are a former employee who is now being accused of trade secrets theft, the Los Angeles trade secret defense lawyers at Tauler Smith LLP can defend you against the allegations and defeat the company’s attempts to get an injunction. The sad reality is that your old boss may attempt to restrict your ability to earn an income even after you have left their company and moved on to a new job. This is very possible if you signed a confidentiality agreement that explicitly limits your freedom of movement within a particular industry. It is also possible that a business competitor will falsely accuse you of stealing their trade secrets if your company becomes too successful.
Our skilled Los Angeles business litigation attorneys have experience defending both individuals and businesses against charges of stealing trade secrets, using proprietary information without consent, violating nondisclosure agreements, and violating covenants not to compete or solicit clients. We know that the law protects you against false allegations of trade secret misappropriation, and we will vigorously defend your rights throughout the legal process.
Contact the California Trade Secret Attorneys at Tauler Smith LLP
When a competitor gains access to your trade secrets, it could give them an unfair advantage in the marketplace and jeopardize your business. That’s one reason the law protects businesses against the theft, use, or disclosure of trade secrets. If you believe that a former employee or competitor has misappropriated your trade secrets, you need to take immediate action and speak with an experienced attorney at Tauler Smith LLP who can handle both intellectual property litigation and business dispute litigation.