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Invasion of Privacy Claims

Right of Publicity & Invasion of Privacy Claims

Invasion of Privacy Claims

Right of publicity & invasion of privacy claims often intersect and overlap, depending on the circumstances of the particular case. California’s privacy laws apply broadly to everyone. When someone else uses your name, image, voice, or other aspect of your identity without permission, they may be violating your right to privacy. Although celebrities do relinquish some of their privacy rights by virtue of being in the public eye, they do not surrender their publicity rights under either California or federal law. Whether you are a celebrity or a non-celebrity, you have the right to keep others from exploiting your image or likeness for commercial purposes.

To learn more about the differences between right of publicity claims and invasion of privacy claims, keep reading this blog.

Publicity Rights vs. Privacy Rights in California

The right of publicity falls into the category of “intellectual property rights” that are protected by both state and federal law. Rights of publicity are similar to something known as an invasion of privacy claim, which is a legal claim that seeks to prevent anyone from interfering with your private affairs or disclosing personal information about you to others.

There are important differences between publicity rights and privacy rights. For instance, an individual’s publicity rights include their image, photo, name, voice, and likeness, while an individual’s privacy rights typically extend to their name or likeness. Additionally, publicity rights are usually limited to uses that involve advertisements or sales from which the defendant derives a commercial benefit.

Statute of Limitations

There is also an extended statutory time period for right of publicity claims in California, with plaintiffs having a post-mortem right under Cal. Civ. Code Section 3344.1 to bring a claim on behalf of a deceased person’s likeness for another 70 years after their death.

Damages

While the damages in a right of publicity case necessarily concern commercial losses suffered by the plaintiff when their likeness is used without authorization, the right of privacy typically concerns emotional distress suffered by the plaintiff when their private affairs or information are shared without permission.

Defamation Claims and the Right of Publicity

A related law that is often cited in these cases is the law against defamation, which prohibits anyone from making disparaging or otherwise defamatory statements about you in certain circumstances.

Defamation claims differ from right of publicity claims primarily when it comes to the truthfulness of the information that is disclosed to the public. When the information about the plaintiff is true, the appropriate legal action is probably a lawsuit for right of publicity misappropriation since the defendant is essentially stealing the plaintiff’s identity. By contrast, when the information about the plaintiff is false, then a claim for defamation of character may be appropriate since the defendant is possibly causing harm by lying about the plaintiff.

California Right of Publicity Claims

What about more traditional right of publicity claims that don’t involve privacy rights? A right of publicity gives you legal control over how certain personal aspects are used by others to promote their goods or services. These aspects that qualify for protection under the law include your name, image, voice, and likeness.

California’s publicity rights law recognizes the inherent commercial value in the average person’s likeness. Once that value has been exploited for a financial benefit, then the person to whom it belongs may have a cause of action to take legal action when someone infringes on their likeness. This means that the plaintiff in a California right of publicity lawsuit needs to establish that they have attempted to benefit financially from their likeness at some point before the defendant tried to do the same.

Contact an Experienced Los Angeles Right of Publicity Lawyer

In an invasion of privacy case that involves the right of publicity, you are going to want to be represented by a lawyer who has a firm grasp of both intellectual property law and internet law. The Los Angeles intellectual property attorneys at Tauler Smith LLP have extensive experience litigating cases involving right of publicity law, privacy law, and trademark claims. We can help you decide the most appropriate next step in your case.

Call us at 310-590-3927 or email us today.

Pet Right of Publicity Claims

Do Pets Have a Right of Publicity in California?

Pet Right of Publicity Claims

Is there a right of publicity for animals? More specifically, do pets have a right of publicity in California? These may seem like silly questions at first glance, but the answers could be very important if you have a pet with a social media presence. These days, it is not uncommon for people to create social media accounts on Instagram, Facebook, Twitter, or Pinterest where they post daily photos of their pets. These accounts can be incredibly popular and often gain hundreds or even thousands of followers. Depending on the circumstances, it may be possible to monetize the accounts through online advertisements, merchandising agreements, and/or licensing deals. This is where the right of publicity would theoretically apply to the pet whose photographs, videos, and other images are posted on the internet.

To learn whether you can file a California right of publicity claim for misappropriation of your pet’s image, keep reading this blog.

California Right of Publicity Claims for Pets

There has yet to be an instance of a California court ruling that pets have a right of publicity under the law. This could leave you exposed to misappropriation of your pet’s identity by others who wish to take your photos and use them for their own commercial purposes.

The good news is that there are still ways to protect your rights in these situations. For example, you may be able to obtain copyright protection for photographs of your pet. Additionally, you may consider trademarking your pet’s name if that name is unique. (E.g., Davey the Dog.) With copyright or trademark protection, you would potentially have the option to file a lawsuit for intellectual property infringement if anyone ever used your pet’s image without authorization.

Statutory Protections for an Individual’s Right of Publicity in California

Of course, California’s right of publicity law does apply to humans. Statutory protections for the right of publicity are set forth in the Celebrities Rights Act, which can be found in California Civil Code Section 3344. The law protects individuals against the infringement of their publicity rights, which means that no one can use another person’s identity for commercial purposes unless the IP holder consents to it.

The statute explicitly protects five (5) aspects of your identity against unlawful commercial exploitation:

  1. Name
  2. Photograph or Image
  3. Likeness
  4. Voice
  5. Signature

An experienced right of publicity lawyer can make sure that your image, name, and voice are protected against unlawful use by others. This is extremely important because these aspects of your identity may have significant monetary value. When someone takes your likeness without permission, they are also taking away your ability to receive recognition and compensation that you are entitled to. Worse yet, if someone uses your likeness in the wrong context (e.g., an advertisement for a product or service with a bad public image), it could adversely affect your ability to earn money in the future.

Common Law Right of Publicity Claims

California recognizes both a statutory right of publicity and a common law right of publicity. This means that plaintiffs have options when deciding to file a lawsuit for right of publicity misappropriation.

California’s statutory protections for the right of publicity are limited to a person’s name, signature, voice, photograph, and likeness. This means that when a plaintiff wants to bring a right of publicity lawsuit for misappropriation of some other aspect of their identity, they will need to do so through a common law right of publicity claim. The good news for plaintiffs is that courts in these cases often use a broad definition of the right of publicity so that it includes things that go well beyond a literal photo of the plaintiff. For example, courts have found that the use of a voice that is meant to imitate a celebrity’s voice may constitute an unlawful misappropriation.

California’s Publicity Rights Law Protects Both Celebrities & Non-Celebrities

Although the right of publicity was once thought to be limited to celebrities and their heirs, this has changed in recent years as social media and reality television have exploded to give many more people an interest in their public image. These days, anyone with a Twitter or Instagram account may be considered a “social media influencer” who is able to monetize their persona and generate substantial income through online advertising. This makes it important for these individuals to protect their right of publicity when someone misappropriates it. The good news is that California’s right of publicity law has strong protections for both celebrities and non-celebrities.

Free Consultation with Los Angeles Right of Publicity Lawyers

If someone has used a photo of your dog, cat, or other pet without permission, they may have violated your legal rights. The same is true if someone has used your likeness in an advertisement without first obtaining your consent. Your next step should be to speak with a Los Angeles right of publicity attorney. The lawyers at Tauler Smith LLP understand this area of the law because we regularly represent clients in both state and federal courts on matters involving intellectual property.

Call our legal team today at 310-590-3927 or email us to schedule a consultation.

Right of Publicity Defenses

Best Defenses to Right of Publicity Claims

Right of Publicity Defenses

If a company uses a person’s photo, voice, or likeness and includes it in their own advertisement without first obtaining consent, they may be violating the person’s right of publicity. In California, there are laws against misappropriating someone’s publicity rights. Unfortunately, not all right of publicity lawsuits are brought in good faith, which is why anyone who has been threatened with this type of litigation should be aware of the best defenses to right of publicity claims. Sometimes, an individual threatens to file a right of publicity complaint simply as a way of pressuring the defendant to pay a quick cash settlement. If this happens to you, it is very important that you speak with a knowledgeable attorney who can honestly assess the situation and help you contest the claim.

What are the best defenses that can be raised in response to a right of publicity claim in California? Keep reading this blog to find out.

What Is California’s Publicity Rights Law?

Some states limit the right of publicity to celebrities, but California has a much more expansive law around this intellectual property right. Any person who knowingly uses someone else’s identity in any manner for products, services, or advertising must have prior consent to do so. The right of publicity usually applies to recognizable aspects of an individual’s identity, such as their image or likeness, their name, their voice, and even a persona that has been created. The statute, California Civil Code section 3344, also stipulates that the person who is injured as a result of the unauthorized use of their image may bring a civil suit for damages.

In order to prevail at trial in a statutory right of publicity lawsuit, the plaintiff must establish all of the following:

  1. The defendant knowingly used the plaintiff’s identity.
  2. The defendant’s use of the plaintiff’s identity was for a commercial purpose.
  3. The plaintiff did not consent to the defendant’s use of their likeness.

What Are the Strongest Defenses to a Right of Publicity Claim in California?

The good news is that the law does give defendants several potential defenses against a right of publicity claim, including the following:

  • Freedom of Speech: The use of the plaintiff’s image was protected by the First Amendment.
  • Newsworthiness: The use of the plaintiff’s image is allowed because there is a public interest in publication.
  • No Misappropriation: There was no misappropriation because the plaintiff’s image was not actually used.
  • Group Photo: There was no misappropriation because the plaintiff’s image was part of a group photo.
  • Plaintiff’s Consent: The defendant had the plaintiff’s consent to use their image.
  • Accidental Misappropriation: The defendant’s misappropriation of the plaintiff’s image was unintentional.

“Freedom of Speech” Defense

One of the strongest defenses available in some right of publicity cases is a First Amendment freedom of speech defense. For example, you may have used the plaintiff’s likeness in a way that added something new and changed the message that would otherwise be conveyed by the likeness. This is known as the “transformative test” because it allows for transformative use of celebrity images, such as parodies that could not possibly be confused with a more straightforward celebrity product endorsement. The idea here is that by incorporating other elements into the image, it becomes a new kind of creative work or artistic expression that qualifies as protected speech under the First Amendment.

There are often First Amendment concerns implicated by a right of publicity lawsuit. This is why you need to be represented a knowledgeable intellectual property attorney who understands the nuances of the law.

“Newsworthiness” or Public Interest Defense

A related defense available in some right of publicity cases is newsworthiness, which is another way of saying that a particular use of the plaintiff’s likeness or persona is valuable to the public because it is of legitimate public concern. Here, the court is likely to balance the right of the plaintiff to maintain some control over the use of their likeness against the public’s right to be informed about important matters. This is known as the public interest defense. Additionally, courts often find that just about any event involving a celebrity is worthy of news coverage. So, the key question in these right of publicity cases will be whether the defendant was truly engaged in journalism, or whether they were using the plaintiff’s image to market or sell something.

No Misappropriation

In some right of publicity cases, it is not immediately obvious that the plaintiff’s likeness is being used at all. For instance, a book might disguise the identity of the plaintiff by using a different name. This does not necessarily mean that the claim will be dismissed, however, since the plaintiff may still be able to show that the book’s content makes it clear that the character is, in fact, the plaintiff.

Group Photo

In California, defendants in a right of publicity case may be able to raise a defense that they did not violate state law by using the plaintiff’s image when it was part of a group photo. But there is an exception to the group photo defense if the plaintiff’s image was singled out from the rest of the crowd in the photograph.

Plaintiff’s Consent

Another defense that might be available in a right of publicity case is that the defendant had the plaintiff’s consent to use their name, image, or likeness for commercial purposes. Many times, this consent comes in the form of a licensing agreement between the parties. Even in cases where the defendant did misappropriate the plaintiff’s identity, it might be possible for the parties to avoid costly litigation by entering into a licensing deal after the fact.

Accidental Misappropriation

In a statutory right of publicity claim, the defendant can potentially avoid liability by showing that their misappropriation of the plaintiff’s identity was accidental. That’s because the Celebrities Rights Act, codified in California Civil Code section 3344, requires the plaintiff to prove that the defendant “knowingly used” the defendant’s identity without consent. (Note: This defense is only available to defendants in statutory right of publicity claims. For a common law right of publicity claim, the plaintiff does not need to show that the use of their identity was knowing or intentional.)

Recovering Attorney’s Fees in a California Right of Publicity Case

The defendant in a right of publicity case may be able to recover their attorney’s fees if they prevail on a claim that their use of the plaintiff’s identity constituted protected speech. This is because California has what is known as an anti-SLAPP law. SLAPP stands for “Strategic Lawsuit Against Public Participation,” and it refers to lawsuits that were brought for the purpose of discouraging criticism and chilling speech that is otherwise protected by the First Amendment. When the defendant wins a right of publicity case with an anti-SLAPP motion, the law gives the court the option to award reasonable attorney’s fees to the defendant.

Contact the Los Angeles Right of Publicity Lawyers at Tauler Smith LLP

If you have been accused of violating someone’s right of publicity in California, it is imperative that you act quickly and speak with an experienced Los Angeles right of publicity lawyer immediately. The attorneys at Tauler Smith LLP routinely represent both plaintiffs and defendants in intellectual property cases, so we are often able to anticipate the arguments that the opposing side will make in court and help our clients win the case.

Call us at 310-590-3927 or send an email to schedule a free initial consultation.

California Right of Publicity Damages

Damages Available in Right of Publicity Claims

California Right of Publicity Damages

You may have worked very hard on your public image, especially if you use that image to generate revenues through a brand or persona that you publicize online. When someone takes your carefully cultivated image without permission, they are stealing your hard work to make money for themselves. Moreover, their actions could be causing significant harm to your image by associating it with a product or service that you do not want to be associated with. The good news is that California law provides you with legal options in these situations, and there are powerful remedies and substantial damages available in right of publicity cases. Additionally, when the plaintiff is successful at trial, the court may also order the defendant to pay attorney’s fees and legal expenses for both sides.

To learn about your options for pursuing damages with a California right of publicity claim, keep reading this blog.

Statutory Damages Available to Plaintiffs in California Right of Publicity Cases

The right of publicity is explicitly protected by the Celebrities Rights Act, and damages for right of publicity violations are set forth in California Civil Code Sec. 3344(a). The law states that any person who misappropriates someone else’s right of publicity “shall be liable to the injured party or parties in an amount equal to the greater of seven hundred fifty dollars ($750) or the actual damages suffered by him or her as a result of the unauthorized use, and any profits from the unauthorized use that are attributable to the use and are not taken into account in computing the actual damages.” The statute also allows for the awarding of punitive or exemplary damages to the party whose right of publicity was violated when the defendant engaged in oppression, fraud, or malice.

The statutory damages in a right of publicity claim can add up very quickly because the plaintiff can sue for each unlawful use of their likeness or persona. Another very important factor when determining damages in a right of publicity case is the total amount of money that the defendant earned or profited from use of the plaintiff’s likeness.

Determining Actual Damages in a California Right of Publicity Claim

It is not always easy to establish an exact amount for actual damages in a right of publicity claim because the value of a person’s name or likeness isn’t obviously quantifiable. This is one way in which right of publicity differs from other intellectual property rights like copyright, trademark, or patent, which commonly involve commercial products or services and reportable revenues.

Some factors that the court may consider when determining damages in a right of publicity lawsuit include the following:

  • The plaintiff’s level of fame.
  • How much money the plaintiff has earned from their likeness in the past.
  • Previous contracts and licenses that include royalties.
  • Whether the plaintiff’s publicity rights have already been licensed. (Unlicensed rights might have more value.)
  • How much money the defendant made from their use of the plaintiff’s likeness.

Punitive Damages in Right of Publicity Cases

The punitive damages question comes after the court has already decided that the defendant misappropriated the plaintiff’s publicity rights. At this point in the case, the court is now left to determine exactly how much money to award the plaintiff. The key issue for the court is whether the defendant committed malice, oppression, or fraud. California law defines these terms as follows:

  • Malice: There are two (2) ways that a defendant can be found to have acted with malice. The first definition of “malice” is any conduct which the defendant intended to cause injury to the plaintiff. The second definition is any despicable conduct which the defendant engaged in with conscious disregard of the rights or safety of other people.
  • Oppression: The statute defines “oppression” as despicable conduct that consciously disregards another person’s rights and that causes cruel and unjust hardship for that person.
  • Fraud: An individual commits fraud when they use an intentional misrepresentation, deceit, or concealment of a material fact for the purpose of depriving someone else of property or legal rights, or for the purpose of causing injury.

The basis for punitive damages awards in publicity law cases actually comes from another statute: California Civil Code 3294. That law stipulates that in any case not involving a contract breach, the plaintiff may be eligible for punitive damages in addition to actual damages. Cal. Civ. Code 3294(a) states that when the defendant has been guilty of oppression, fraud, or malice, the plaintiff “may recover damages for the sake of example and by way of punishing the defendant.” The idea behind punitive damages is that the defendant’s conduct has been so egregious that they deserve to be punished in some way that goes beyond the actual injury or harm caused. Moreover, punitive damages awards have a deterrent effect in that they serve as a reminder to other people that they should not violate the law in the future.

Exception to Punitive Damages

There are strong defenses that can be raised in right of publicity cases, including an exception for punitive damages that may be available to some employers. That’s because Cal. Civ. Code Sec. 3294(b) stipulates that when a right of publicity misappropriation was committed by an employee of the defendant, the defendant-employer will not be liable unless the plaintiff can show that the employer had certain advance knowledge. For instance, the plaintiff must prove to the satisfaction of the court that the employer knew that the employee who would later go on to violate the plaintiff’s right of publicity was, in fact, unfit for the position. For corporate employers, the plaintiff must show that the advance knowledge was possessed by an officer, director, or managing agent of the corporation. Additionally, an employer can still be liable for punitive damages if they were personally guilty of oppression, fraud, or malice, as those terms are defined in the statute.

Other Remedies Available in Right of Publicity Claims

Plaintiffs with possible right of publicity claims may also be able to pursue remedies through different statutes. California Civil Code Section 3344(g) explicitly states that these remedies are cumulative “and shall be in addition to any others provided for by law.” This opens the door for plaintiffs to bring other civil suits in addition to the right of publicity lawsuit.

Additionally, one important consideration for plaintiffs in a right of publicity case is whether the defendant has insurance coverage. That’s because a lot of publicity rights claims involve defendants with insurance companies that will ultimately pay out any settlement or damages award issued by the court.

Contact the Los Angeles Right of Publicity Attorneys at Tauler Smith LLP

Your identity could have significant monetary value in the internet era, especially if you are an influencer on social media platforms like Instagram, Facebook, Twitter, Pinterest, YouTube, or Vimeo. You never know when your image or likeness might be sought for online advertisements. If someone has used your identity without permission, the experienced Los Angeles right of publicity lawyers at Tauler Smith LLP can help you take legal action.

Call 310-590-3927 or email us to schedule a free consultation.

Trade Secret Defenses

Best Defenses to Trade Secret Claims

Trade Secret Defenses

California and federal trade secret laws are supposed to protect businesses against the unlawful acquisition, use, or disclosure of their proprietary information. But these legal protections can also open the door for the filing of bad faith claims by business owners who may have a grudge against a former employee or a competing company. If you are being sued for trade secret misappropriation, it is important that you speak with an attorney who understands both state and federal intellectual property law and who can advise you on the best defenses to trade secret claims.

To learn about the best defenses that may be available in your California trade secret case, keep reading.

What Defenses Are Available in California Trade Secret Cases?

One of the main ideas behind trade secret laws is that businesses should have a way to prevent others from disclosing and/or using their confidential information. In fact, these laws are so robust and plaintiff-friendly that plaintiffs are often able to win and collect substantial monetary damages. This is one reason why any defendant in a trade secret action should be represented by an experienced California trade secret lawyer who can raise strong defenses on their behalf.

These are just a few of the possible defenses in a California trade secret case:

  1. The information was not a “trade secret.”
  2. The information was not misappropriated.
  3. The defendant had whistleblower immunity.
  4. The statute of limitations expired.

The Information Was Not a “Trade Secret”

The federal Defend Trade Secrets Act (DTSA) defines a trade secret as information that is valuable because it cannot be readily ascertained through proper means. A potential defense available in federal trade secret claims filed under the DTSA is that the information was “readily ascertainable” through lawful means. For example, the defendant may be able to show that they acquired the data in material that was published online or in books. This would mean that the information was not confidential since it was, by definition, generally available to others. This exact defense is not available in claims filed under the California trade secrets statute because the California Uniform Trade Secrets Act (CUTSA) defines a trade secret more broadly. But it is still possible for a defendant in a CUTSA action to argue that the information does not qualify as a trade secret because it was “generally known to the public.”

A related defense that may be an option in some California trade secret cases is that the plaintiff failed to take sufficient steps to protect their proprietary information. Both the DTSA and the CUTSA require plaintiffs to make reasonable efforts to ensure that their information remains confidential. When the business owner fails to do at least the bare minimum to maintain the secrecy of the information (e.g., imposing restrictions on which employees can potentially access it), then it may not qualify as a “trade secret” under the law.

The Information Was Not Misappropriated

Even if the plaintiff establishes that the information at issue in the case qualifies as a trade secret, the defendant may be able to argue that there was no misappropriation because the information was lawfully acquired. Under both the California Uniform Trade Secrets Act (CUTSA) and the federal Defend Trade Secrets Act (DTSA), a person or entity is liable for trade secret misappropriation only if the information was acquired through “improper means.” This typically means actions such as theft, espionage, misrepresentation, bribery, or breach of a duty to maintain the secrecy of the information. By contrast, a good example of a lawful action to acquire trade secrets is reverse engineering of a formula or recipe by a rival company. Since this information would have been discovered through publicly available means, it does not violate trade secret law.

The Defendant Had Whistleblower Immunity

When Congress passed the Defend Trade Secrets Act (DTSA), they included provisions that explicitly protect individuals who reveal trade secrets in certain situations. For example, a whistleblower who discloses confidential information to a government official while reporting illegal activity by their employer would be immune from prosecution and from civil liability in a trade secret lawsuit. The same is true for a whistleblower who discloses proprietary information to an attorney in the context of reporting unlawful actions by their employer.

The Statute of Limitations Expired

Defendants in some trade secret cases may be able to raise a defense that the statute of limitations for filing a trade secret claim has expired. In California trade secret actions, the plaintiff has just three (3) years to bring a lawsuit, and the clock starts as soon as the plaintiff has either actual notice of the misappropriation or constructive notice of the misappropriation. (“Constructive notice” means that the plaintiff had reason to investigate and should have discovered the trade secret theft or use.)

Contact the Los Angeles Trade Secret Litigation Attorneys at Tauler Smith LLP

If you have been accused of misappropriating a company’s trade secrets by disclosing information to a competitor or using information without permission, you are going to want a skilled attorney assisting you. The Los Angeles trade secret attorneys at Tauler Smith LLP have extensive experience representing defendants in California trade secret lawsuits, and we are prepared to help you raise strong defenses to win at trial or get the claim dismissed before trial.

Call us at 310-590-3927 or email us to schedule a free consultation.

Trade Secret Definition

What Is a Trade Secret?

Trade Secret Definition

It is vital for any business owner to know the answer to this question: “What is a trade secret?” Sometimes, a company’s intellectual property assets are valuable precisely because information about those assets is not generally known to the public. These are considered “trade secrets,” and both California and federal law afford businesses with legal protections for their trade secrets. These laws recognize that when a company loses its proprietary information due to theft or infringement, the results can be disastrous. The company may see its advantage over competitors in the marketplace disappear, leading to critical revenue losses. Worse yet, the company may lose its core technologies that help the business to survive. An experienced California intellectual property lawyer can protect you against this fate and help you take appropriate legal action in state or federal court.

To learn more about how trade secrets are defined under California law, keep reading.

How Does California Law Define a “Trade Secret”?

A trade secret has three main components:

  1. It gains value from not being generally known by the general public. This value can be actually realized, or it may be potential value.
  2. It has particular value to others who cannot acquire the information. (E.g., competing businesses.)
  3. Its secrecy has been maintained through reasonable efforts.

These aspects of a trade secret can make it a valuable intellectual property asset for many businesses. Where trade secrets differ from other types of intellectual property like patents, copyrights, and trademarks is that trade secrets are never formally registered with the government for protection. Another difference between trade secrets and other kinds of intellectual property is that trade secrets are, by definition, not publicly recognized.

CUTSA Definition of “Trade Secrets”

The U.S. Patent and Trademark Office (USPTO) defines a “trade secret” as a type of intellectual property. Federal lawmakers recognized the importance of protecting trade secrets in 2016 when they passed the Defend Trade Secrets Act (DTSA) and gave businesses and individuals a right to file a civil suit when their trade secrets are misappropriated. Under the DTSA, any information that derives independent economic value from the fact that it cannot be easily ascertained by others may qualify for protection as a trade secret.

The California Uniform Trade Secrets Act (CUTSA) defines a “trade secret” even more broadly as any information that is not generally known to others who might find it valuable. This means that there is no substantial limit to the types of information that may be protected under California’s trade secret law. Common examples of trade secrets include client lists, company financial data, internal forecasts and projections, advertising plans, designs and other technical plans, formulas, manufacturing techniques, and computer source code. One of the most famous examples of a trade secret is the formula for Coca-Cola.

Basically, if the information is the sort that a competitor would need to spend money or time to discover, then it probably qualifies as a trade secret. But if even one person outside the business already knows the information without it having been disclosed, then it might not be a trade secret.

Proving Trade Secret Misappropriation in California

Winning a trade secret claim requires the plaintiff to first establish that the confidential information at issue does, in fact, qualify as a trade secret. Next, the plaintiff will have to prove that the defendant misappropriated the data.

As set forth by California law, trade secret misappropriation can include any of the following acts involving confidential information:

  • Wrongful acquisition.
  • Wrongful use.
  • Wrongful disclosure.

A person or entity is deemed to have “misappropriated” a trade secret when they use illegal or improper means to acquire it. This can include theft, bribery, espionage, a misrepresentation, or a breach of duty to maintain the secret. In addition to prohibiting the illegal acquisition of a trade secret, the CUTSA also explicitly bars anyone from disclosing a trade secret without consent of the rightful owner, as well as prohibiting anyone from using a trade secret that was illegally acquired. This means that both the person who took or disclosed the trade secret and the person or company who later used the information may be liable under California trade secret law.

Contact the Los Angeles Trade Secret Lawyers at Tauler Smith LLP

If you are a business owner whose proprietary information was stolen by an ex-employee, disclosed to a competitor, or used by another company, then you may have a valid claim for trade secret misappropriation. Your best move now is to speak with a Los Angeles trade secret lawyer who has experience bringing these claims in California courts. The legal team at Tauler Smith LLP understands the nuances of both federal and state laws addressing trade secrets, and we know how to win trade secret litigation.

Contact us today by calling 310-590-3927 or sending an email.

Trade Secret Statute of Limitations

Statute of Limitations for Trade Secret Claims

Trade Secret Statute of Limitations

The legal system has many complexities, such as a requirement that plaintiffs not wait too long to file lawsuits in either California courts or federal court. This is one reason why it’s so important for any business owner with valuable intellectual property to have a solid understanding of California IP laws, including the statute of limitations for trade secret claims. The reality is that an individual’s failure to file their civil suit within a time period set forth by the applicable statute could bar them from ever getting compensation, even if their claim is valid. The best way to ensure that you do not miss the statute of limitations and lose you right to bring a lawsuit is to speak with a knowledgeable California trade secret lawyer as soon as possible.

To learn more about the statute of limitations for California trade secret claims, keep reading.

How Long Do You Have to File a Trade Secret Claim in California?

Under California law, anyone who wants to bring a trade secret claim must do so within three (3) years. Failure to take prompt action could permanently bar your claim and prevent you from getting any of the remedies available in trade secret litigation.

The critical factor here is determining exactly when that three-year period begins. The law requires plaintiffs to file their claims no later than three years after either of the following has occurred:

  1. When the plaintiff actually learns about the defendant’s misappropriation of trade secrets.
  2. When the plaintiff should have learned about the defendant’s misappropriation of trade secrets.

When Does the Statute of Limitations Start in California Trade Secret Lawsuits?

Most obviously, the clock starts ticking on the trade secret statute of limitations when the misappropriation is first discovered. Once the plaintiff has actual notice of trade secret misappropriation, they must bring a legal claim within three (3) years.

But what happens when the plaintiff does not have notice of trade secret misappropriation? There is another way for the clock to start: when the misappropriation should have been discovered. This potentially gives defendants in trade secret actions some possible defenses because courts will typically apply a looser standard of proof in circumstances where the plaintiff failed to exercise reasonable diligence to discover the trade secret infringement. If a business owner suspects or otherwise believes that their trade secret was stolen or disclosed to competitors, then the business owner may have a legal obligation to investigate. Moreover, that investigation should occur in a timely fashion. Failure to take prompt action to investigate could open the door for the defendant in a later trade secret action to seek dismissal of the case, particularly if the claim was filed more than three (3) years after the misappropriation began.

Courts will use a “reasonable person standard” in these cases to determine whether the plaintiff should have taken faster action to investigate the possible trade secret use. This means that the court will ask whether a reasonable person would have acted as the plaintiff did, or whether a reasonable person would have investigated their suspicions about trade secret theft.

Tolling the Statute of Limitations in California Trade Secret Cases

The three-year statute of limitations for trade secret claims filed under the California Uniform Trade Secrets Act (CUTSA) doesn’t necessarily run continuously. That’s because the statute of limitations can be tolled (temporarily stopped) in certain circumstances where the defendant leaves the state. This applies when a defendant is a California resident and then temporarily goes to another state with the expectation of returning later. It also applies when a defendant is a resident of a different state and has not yet entered the state of California. The idea behind this exception to the statute of limitations is that defendants should not be able to avoid communications or being served notice in a case where the plaintiff has limited time in which to file.

Importantly, the clock does not stop when there is more than one instance of a defendant misappropriating the trade secret. In a lot of trade secret cases, the defendant commits multiple violations by continuing to use or disclose the confidential information. Under California law, this does not affect the statute of limitations. The clock does not restart in trade secret claims each time the defendant commits another infringement. That’s because California courts have held that only the initial misappropriation triggers the statute of limitations, and each subsequent misappropriation is viewed as a related violation.

Free Consultation with Los Angeles Trade Secret Lawyers

Tauler Smith LLP is a California law firm that focuses on intellectual property law. We represent both plaintiffs and defendants in cases involving trade secret claims, and we regularly appear in federal and state courtrooms. One of our experienced Los Angeles trade secret attorneys will speak with you about your case and help you determine the appropriate steps to take. Call 310-590-3927 or email us to schedule a free initial consultation.

California Trade Secret Remedies

Trade Secret Remedies in California

California Trade Secret Remedies

Trade secrets encourage innovation from businesses who will have a competitive advantage versus their competitors. Unfortunately, it is extremely easy these days for someone to acquire a company’s trade secrets, especially when the information is stored online or digitally. This can make it very tempting for an unethical employee to access the data and steal it. The good news is that the law gives courts several options when it comes to imposing trade secret remedies in California.

To learn more about the remedies available to plaintiffs in California trade secret cases, keep reading this blog.

Damages & Injunctions in California Trade Secret Cases

California’s trade secret law largely mirrors the Uniform Trade Secrets Act that has been adopted by most states. California’s version of the Uniform Trade Secrets Act (CUTSA) gives plaintiffs a cause of action when their confidential or proprietary information has been stolen, disclosed, or used without permission.

Additionally, the CUTSA explicitly provides for the following remedies:

  • Injunctive Relief
  • Damages
  • Attorney’s Fees and Costs

Injunctive Relief

When a company’s trade secret is misappropriated, the first order of business is usually to take immediate legal action to stop the unauthorized use of the information. The CUTSA allows courts to act quickly by issuing an injunction that bars the defendant from continuing to publish or otherwise use the confidential information. If a permanent injunction is issued in the case, then the defendant would no longer be able to use the trade secret going forward.

Sometimes, it might not be possible to undo or reverse the harm caused by disclosure of the trade secret, and use of the confidential information going forward may be unavoidable. In these cases, the court could require the defendant to pay a royalty to the plaintiff for continued use of the trade secret.

Damages

Damages are a common remedy available to plaintiffs in most civil suits, including intellectual property claims that involve trade secrets. In California trade secret claims, a court may award actual (or general) damages to compensate the business owner for any economic harm they suffered because of the defendant’s misappropriation. Actual damages can also include compensation for any profits the defendant received from use of the confidential information, such as when a competing company uses a trade secret to improve their product and generate increased revenues.

In some trade secret cases, the court may also award exemplary damages to the plaintiff. These types of punitive remedies are usually imposed only when the defendant is found to have acted “willfully or maliciously” in stealing, disclosing, or using the proprietary information at issue in the case. As set forth by the CUTSA, there is a cap on exemplary damages of twice the plaintiff’s actual damages.

Attorney’s Fees

In extreme cases where the defendant acted willfully or maliciously while misappropriating trade secrets, the plaintiff may be eligible for reasonable attorney’s fees and legal expenses. This means that the plaintiff would not have to pay their own legal expenses in the case, with those fees instead being shifted to the defendant whose actions necessitated the legal action in the first place. Of course, these cases are rare because the standard of proof is very high.

California courts may consider the following five (5) factors when determining whether the willful and malicious standard is met in a trade secret claim:

  1. Did the defendant’s actions cause physical harm?
  2. Did the defendant’s actions disregard the health and safety of others?
  3. Did the defendant target a financially vulnerable party?
  4. Did the defendant repeat their misconduct on more than one occasion?
  5. Did the defendant use intentional malice, trickery, or deceit to misappropriate the trade secrets?

For example, a defendant who lured a business owner into a meeting or deal where the trade secrets were exposed may be deemed to have acted “willfully and maliciously.” Courts typically want to impose remedies that deter this sort of behavior and make others think twice about taking similar actions in the future. That’s because the marketplace is undermined when business owners can’t engage in negotiations or acquisition discussions without worrying about whether their innovations and hard work will be stolen.

It is also worth noting that defendants may be eligible for an award of attorney’s fees in certain instances. That’s because California Civil Code § 3426.4 stipulates that a plaintiff must not act in bad faith when filing a trade secret misappropriation claim. If the plaintiff in a trade secret action is found to have filed their lawsuit with no honest expectation of winning the case, then the court may award attorney’s fees and costs to the defendant.

Civil Seizure in Federal Trade Secret Cases

The remedies available in federal trade secret claims filed under the Defend Trade Secrets Act (DTSA) are largely identical to the remedies available under the CUTSA, but there is an additional remedy available to some plaintiffs in federal trade secret cases: civil seizure. When there are extraordinary circumstances, the court can issue an order to seize property before the case has been resolved. The logic behind civil seizure in trade secret claims is that the infringement should not be allowed to continue while the legal system takes time to sort through the matter.

Free Consultation with the Los Angeles Trade Secret Lawyers at Tauler Smith LLP

If your confidential information has been misappropriated by a competing company, a former employee, or anyone else, both California and federal law can be useful tools to stop the unauthorized use of your trade secrets. These laws can also be used to help you get compensation for any harm already done because of the trade secret theft or disclosure. The Los Angeles trade secret lawyers at Tauler Smith LLP routinely represent clients in intellectual property claims, and we are prepared to assist you with your claim.

Call us at 310-590-3927 or email us to schedule a free initial consultation.

California Uniform Trade Secrets Act

What Is California’s Trade Secrets Law?

California Uniform Trade Secrets Act

Trade secrets and other intellectual property can be extremely valuable to companies, particularly when those companies have competitors with similar products or services. That’s a major reason why companies will go to great lengths to ensure that their trade secrets and other IP assets remain confidential. If you are a business owner whose trade secret is being used without permission, you may be asking yourself, “What is California’s trade secrets law?” The good news is that California business owners can avail themselves of the California Uniform Trade Secrets Act (CUTSA) when their trade secrets have been misappropriated by a former employee, a competitor, or any other person or entity.

To learn more about California’s trade secrets law, keep reading.

California Uniform Trade Secrets Act Protects the Intellectual Property Rights of Businesses

The Uniform Trade Secrets Act (UTSA) gives owners of trade secrets a legal right to file a lawsuit in state court when their trade secrets have been stolen or misappropriated. California’s version of the Uniform Trade Secrets Act is codified in Cal. Civil Code § § 3426-3426.11.

California has a unique spin on the Uniform Trade Secrets Act that gives employers broader protection against theft or misappropriation of trade secrets by an employee. That’s because the California law explicitly states that an employer owns all trade secrets created by an employee within the scope of their employment. (There is an exception to this rule: when an employee creates the secret information on their own time and outside the scope of their employment, the employee may claim ownership of the information.)

The California UTSA also gives businesses a legal right to sue a rival company that uses a trade secret without authorization. Importantly, the standard of proof in these cases does not require plaintiffs to show that the defendant knew the information was a trade secret. Instead, all that is needed from plaintiffs is a showing that the defendant had reason to know or should have known that they might be using a trade secret.

What Is the Definition of a “Trade Secret” Under California Law?

Trade secrets are an important intellectual property right. But what exactly is a trade secret? The CUTSA defines a “trade secret” broadly to include just about any information utilized by a business, including “formulas, patterns, compilations, programs, devices, methods, techniques, and processes.”

All the following are examples of trade secrets that companies may need to protect against misappropriation:

  • Customer lists
  • Marketing strategies
  • Manufacturing processes
  • Computer software
  • Food recipes and formulas
  • Inventions without patents

How Do You Prove a CUTSA Claim?

Winning a CUTSA claim requires the plaintiff to prove two elements:

  1. That the information at issue was, in fact, a trade secret.
  2. That the information was misappropriated.

Proving the Information was a “Trade Secret”

As defined by the California Uniform Trade Secrets Act (CUTSA), a “trade secret” can be just about any piece of information that has value stemming from its secrecy. Basically, all that is necessary to establish the first element of a CUTSA claim is that (1) the information has independent value from the fact that it’s not known by others, and (2) the company has taken reasonable steps to protect the information.

When filing a lawsuit under the CUTSA, the plaintiff must name the confidential information at issue. The statute explicitly requires plaintiffs filing a CUTSA claim to “identify the trade secret with reasonable particularity” and disclose that information to both the court and the defendant. This runs the risk of making that secret information available to the general public, which is why many business owners choose not to file patent applications with the United States Patent and Trademark Office (USPTO) and instead rely on trade secret protections. It’s also a good reason why any business looking to file a trade secrets claim in California court should speak with a lawyer first. An experienced attorney can potentially help you obtain a protective order that seals the records and limits the public from seeing any proprietary information disclosed in the case.

Proving the Information was “Misappropriated”

For the second element under the CUTSA, a trade secret is “misappropriated” when it has been improperly acquired, used, or disclosed by the defendant. The most obvious examples of trade secret misappropriation involve theft or espionage. Even if the defendant was an employee granted access to the information, however, it may still qualify as misappropriation if the employee had a duty to maintain the secrecy of the information and subsequently breached that duty.

The plaintiff in a CUTSA action does not need to show that the defendant physically took the confidential information. For example, if a former employee remembers certain information and then uses or discloses that information without authorization, it may constitute trade secret misappropriation as set forth by the CUTSA. This is a major difference between the California Uniform Trade Secrets Act and other trade secret statutes that allow for ex-employees to claim that they cannot be expected to “wipe clean” their memories.

Federal Trade Secret Laws

Trade secret owners are already able to file suit in federal court under the Defend Trade Secrets Act (DTSA). For business owners in California and most other states, the Uniform Trade Secrets Act (UTSA) provides another option.

There is also a federal law that criminalizes the theft of trade secrets in certain circumstances. The Economic Espionage Act of 1996 makes it illegal for anyone to steal a trade secret and disclose it to a foreign entity. Violation of the statute is punishable by up to 15 years in prison and $5 million in fines. It should also be noted that there can be both a criminal prosecution under the Economic Espionage Act and a private civil action under the CUTSA.

Contact the Los Angeles Trade Secret Lawyers at Tauler Smith LLP

The Los Angeles trade secret lawyers at Tauler Smith LLP have experience filing CUTSA claims in California state courts. We understand the nuances of the law, and we know what is needed to help our clients prevail at trial. Call 310-590-3927 or email us to schedule a free consultation with a member of our intellectual property team.

Defend Trade Secrets Act

What Is the Defend Trade Secrets Act?

Defend Trade Secrets Act

Trade secrets protect the things that make a business unique, and trade secrets themselves are protected by both federal and state laws. California trade secret lawyers are often asked, “What is the Defend Trade Secrets Act?” The Defend Trade Secrets Act is a federal law that applies to any trade secrets related to products or services used in interstate commerce. The statute also applies to trade secrets used internationally. It is an important tool for anyone who needs to take legal action to protect their confidential or proprietary information.

To learn more about the Defend Trade Secrets Act, keep reading this blog.

Federal Law Protects Businesses Against Trade Secret Misappropriation

The federal Defend Trade Secrets Act was passed by the United States Congress and codified into law in 2016. The statute is an important tool in intellectual property claims, particularly for business owners who believe that an ex-employee or business competitor has used their trade secrets without authorization or permission. The idea behind the Defend Trade Secrets Act is that trade secret owners should have a way to safeguard their trade secrets against theft or misappropriation. For example, the Defend Trade Secrets Act makes it unlawful for an ex-employee to solicit their former employer’s customers.

Importantly, the Defend Trade Secrets Act does not preempt state laws. For example, a victim of trade secret theft in California may choose to file a lawsuit under the Uniform Trade Secrets Act (CUTSA). An experienced intellectual property lawyer can help you decide which statute and venue will be most favorable to your case.

What Is the Definition of “Trade Secret Misappropriation”?

The United States Patent and Trademark Office (USPTO) defines a “trade secret” as any information that has independent economic value because it is not generally known, has value to others who do not have access to the information, and is subject to efforts to maintain its secrecy.

Under the Defend Trade Secrets Act, protected information can include “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing.” The DTSA’s broad definition of “trade secret” gives businesses wide latitude when seeking legal protection for their proprietary information. For California business owners, it can sometimes be advantageous to file suit in federal court under the DTSA instead of suing in state court under the California Uniform Trade Secrets Act (CUTSA).

How Do You Establish a Violation of the Defend Trade Secrets Act?

Certain acts can give rise to a legal claim under the Defend Trade Secrets Act. These acts of misappropriation include the following:

  • Acquisition of a trade secret through improper means.
  • Disclosure of a trade secret by someone who used improper means to acquire the information.
  • Disclosure of a trade secret by someone who had reason to know that the information was acquired improperly.
  • Disclosure of a trade secret by someone who knew that the information had been acquired by accident or mistake.

If you believe that someone is using your trade secrets without authorization, the experienced Los Angeles trade secret attorneys at Tauler Smith LLP can assist you. Our California intellectual property team will evaluate the facts of your case and help you determine whether your legal claim should be filed under federal law or state law.

What Remedies Are Available to Plaintiffs in DTSA Cases?

One unique remedy available to plaintiffs in DTSA cases is civil seizure. This allows the court to order the seizure of property to prevent the dissemination of the trade secret at issue in the case. Moreover, this order may be issued prior to a resolution in the case, which means that courts can act quickly to stop a potential infringement of trade secrets while the matter is still being adjudicated. Civil seizure is only supposed to be an option for plaintiffs in “extraordinary circumstances.”

Additionally, the most common trade secret remedies available to plaintiffs in DTSA cases include the following:

  • Actual damages to compensate the plaintiff for trade secret misappropriation that has already occurred.
  • Exemplary or punitive damages if the trade secret was “willfully and maliciously misappropriated.”
  • An injunction to protect the trade secret.
  • Payment of a royalty to the plaintiff when future use of the trade secret is inevitable.
  • Attorney’s fees.

Trademark & Patent Claims

Additionally, trade secret claims filed under the Defend Trade Secrets Act may be accompanied by trademark infringement claims and patent infringement claims on related matters and/or IP assets. These other legal claims can provide plaintiffs in trade secret cases with additional remedies.

The Economic Espionage Act of 1996

The Defend Trade Secrets Act is a companion to the Economic Espionage Act, which imposes criminal penalties against individuals who reveal trade secrets to foreign entities, such as a foreign government, business, or agent. When someone commits trade secret theft in violation of the Economic Espionage Act, they may be prosecuted by the U.S. Department of Justice.

DTSA Exception for Whistleblowers

Congress made sure to carve out an exception for certain whistleblowers who reveal trade secrets to the government. That’s why the Defend Trade Secrets Act provides corporate whistleblowers with legal protection in the form of legal immunity from criminal prosecution. Whistleblowers are also immune from civil liability under either federal or state laws, if they meet certain conditions such as disclosing the trade secret to a government official.

Importantly, the Defend Trade Secrets Act also requires companies to let their employees know about these whistleblower immunity provisions. If a company fails to inform employees through employment manuals, policies, or contracts, then the company may no longer be eligible to pursue punitive damages and attorney’s fees if there is a DTSA lawsuit at a later date.

Contact the California Trade Secret Lawyers at Tauler Smith LLP

Tauler Smith LLP is a California law firm that helps business owners and individuals protect their intellectual property rights, including trade secrets. Our Los Angeles trade secret lawyers routinely represent both plaintiffs and defendants in U.S. District Court, and we know what it takes to win these cases. Contact us today by calling 310-590-3927 or sending an email.