The importance of intellectual property rights to business owners cannot be overstated, particularly when those IP rights stem from confidential information that the businesses depend on for their competitive advantage over competitors. For instance, many companies use proprietary information to create subtle differences between their products and those belonging to other companies. This means that when someone misappropriates a trade secret, the harm suffered by the rightful IP owner can be significant. Irvine trade secret lawyers understand that legal action, or at least the sincere threat of legal action, is often necessary to protect against theft of things like client lists, secret formulas, and other vital company data.
What Laws Protect Irvine Business Owners Against Trade Secret Theft?
The good news for Irvine business owners who believe that their confidential information has been stolen or used without permission is that there are both federal and state laws that explicitly prohibit the misappropriation of trade secrets. The federal statute is the Defend Trade Secrets Act (DTSA), and the California state statute is the Uniform Trade Secrets Act (CUTSA).
Defend Trade Secrets Act (DTSA)
The federal law that provides individuals and businesses with a legal remedy for trade secret misappropriation is known as the Defend Trade Secrets Act (DSTA). The statute enables plaintiffs to file a civil suit in U.S. District Court against anyone who steals, discloses, or uses their proprietary information. Plaintiffs in these kinds of federal trade secret actions must establish that the information at issue is related to products that are part of interstate commerce. A federal trade secret claim can also be filed when the products were sold internationally. For a business located in Irvine, these claims may be brought in the United States District Court for the Central District of California.
California Uniform Trade Secrets Act (CUTSA)
Irvine business owners may elect to bring their trade secret claim at the state or local level by relying on the California Uniform Trade Secrets Act (CUTSA). This is a California-specific statute that basically mirrors the Uniform Trade Secrets Act (UTSA), which is the law in most states. The CUTSA allows California businesses to take legal action when someone uses their proprietary information. This often involves a former employee of the company who disclosed trade secrets to their new employer.
What Is the CUTSA Definition of a Trade Secret?
One of the first questions that is asked in any trade secret case is: “Was the information in question actually a trade secret?” The answer to this question is determined by a more fundamental question: what exactly is a trade secret?
The California Uniform Trade Secrets Act defines a trade secret as having four (4) components:
- The information is not known by anyone outside the company.
- The company has made reasonable efforts to keep the information confidential.
- The information cannot be easily obtained by anyone outside the company.
- The secret has independent economic value because it is not known by others.
How Is a Trade Secret “Misappropriated” Under California Law?
When bringing a trade secret claim in California, the plaintiff must prove that the defendant violated the law by misappropriating the confidential information. There are several types of misappropriation in the context of the California Uniform Trade Secrets Act (CUTSA). For example, the defendant may have acquired the trade secret by gaining access to company files while employed there. If they later sold or disclosed the files to another company, this would be a violation of the law. It is important to note that the disclosure doesn’t have to be intentional. Even if the defendant accidentally revealed the confidential information after leaving the company, the unintentional act could be considered trade secret misappropriation.
What Remedies Are Available to Plaintiffs in Irvine Trade Secret Cases?
The law provides several remedies for plaintiffs in trade secret cases. The two most common remedies are the issuing of an injunction and the awarding of damages. In a lot of trade secret actions, the plaintiff’s main objective is simply to force the defendant to stop using the proprietary information. This can be accomplished by getting the court to issue a permanent injunction that blocks the defendant from continuing to profit from the information that was unlawfully disclosed.
In some cases, however, an injunction won’t undo the harm that has already been caused by the disclosure. For example, what if the defendant profited by learning a previously unknown formula or business strategy used by the plaintiff? Or what if the plaintiff has suffered substantial losses in revenue because of the trade secret misappropriation? In these instances, the court may award damages to the plaintiff and order the defendant to pay monetary compensation. Additionally, in rare cases, the court may award punitive damages that go above and beyond any financial harm suffered by the plaintiff. Punitive damages are typically limited to cases where the defendant acted willfully and maliciously in stealing or using the trade secrets.
Act Quickly to Avoid the Statute of Limitations in an Irvine Trade Secret Case
It is extremely important that you take immediate action to preserve your legal rights when you believe that someone has misappropriated your trade secrets. That’s because both federal and state law could bar you from bringing a lawsuit if too much time has passed since you found out about the misappropriation. The skilled Irvine trade secret attorneys at Tauler Smith LLP will investigate the details of your case and make sure that you do not lose the ability to file a civil suit due to the statute of limitations expiring.
About Irvine, California
Irvine is in Orange County, California. The city is a popular place for families because it has an excellent school system and well-funded municipal agencies, which has resulted in a surge in residents in recent years. Today, Irvine has a population of more than 300,000 people. Additionally, in surveys and polls, Irvine is routinely named as one of the nation’s safest cities and ranks among the best places to live in the United States. The city is also known for having a strong economy thanks to the presence of many technology companies, including both established businesses and startups.
Contact the Irvine Trade Secret Attorneys at Tauler Smith LLP
If you are a business owner whose trade secrets may have been taken by a former employee, competitor, or anyone else, the Irvine trade secret lawyers at Tauler Smith LLP can help you. Our legal team has extensive experience representing individuals and businesses in intellectual property claims involving copyrights, trademarks, and trade secrets. You can call us at 310-590-3927 to discuss your case over the phone, or you can send an email to schedule a free initial consultation.