INVESTIGATING POTENTIAL TRADE SECRET THEFT & MANAGING RIGHTS: WHAT YOU NEED TO KNOW

Trade secrets are critical assets of many businesses, providing a crucial edge over competitors. At Ganz Law, PC, we understand the importance of protecting trade secrets and other confidential information. If you suspect trade secret theft, it's essential to conduct a thorough investigation. Here’s a breakdown of what to consider and how we can help.

UNDERSTANDING WHAT QUALIFIES AS A TRADE SECRET 

First, we need to establish if what you're concerned about actually qualifies as a trade secret. Generally, it includes:

 Confidential and Valuable Information

This could be anything from formulas and processes to customer lists that provide a competitive advantage.

Efforts to Keep It Secret

You should have taken reasonable steps to protect the information, like using non-disclosure agreements (NDAs) or restricting access.

Improper Acquisition

The information must have been obtained through wrongful means, such as theft or breach of confidence.

Not Publicly Known

The information shouldn’t be easily accessible or known to the public.

Awareness of Confidentiality

The person or entity suspected of theft should have known, or at least suspected, that the information was confidential.

Global Usage Guidelines

Given that businesses may operate globally, it’s essential to create guidelines that accommodate the legal requirements of various jurisdictions while ensuring consistency and compliance.

STATE LAW: THE UNIFORM TRADE SECRETS ACT (UTSA)

Most states follow the Uniform Trade Secrets Act, which sets out what qualifies as a trade secret and the remedies available if someone steals it. Key points include:

Defining Trade Secrets

It’s about any information that has value from not being known publicly and is protected by reasonable security measures.

Misappropriation

This means acquiring, disclosing, or using the trade secret without permission.

Available Remedies

These can include stopping the wrongful use, compensating for losses, and possibly punitive damages for deliberate theft.

 
FEDERAL LAW: THE DEFEND TRADE SECRETS ACT (DTSA)

On the federal level, the Defend Trade Secrets Act offers a different avenue for protection:

Federal Jurisdiction

You can bring your case to federal court, ensuring consistency in how the law is applied.

Broader Scope

Sometimes, less detail is needed to prove what was taken.

Complementary Claims

The DTSA doesn't override state laws, so you can often pursue both state and federal claims.

Related Federal Claims

This might include claims under the Computer Fraud and Abuse Act (CFAA), among others.

 WHAT REMEDIES ARE AVAILABLE?

If your trade secrets have been stolen, there are several ways to seek justice:

 Actual Damages

Compensating for the losses directly caused by the theft.

Unjust Enrichment

Recovering any profits made by the wrongdoer using your trade secret.

Injunctive Relief

A court order to stop the other party from using or disclosing the trade secret.

Royalties

Sometimes, it’s tough to prove exact losses, so courts may order the wrongdoer to pay royalties.

Ex Parte Seizure

Under the DTSA, there's a rare but powerful option to seize property without notifying

ADDITIONAL CLAIMS WE CAN PURSUE

Often, trade secret theft isn't an isolated act. It can involve other wrongful actions, and we can help pursue these additional claims:

 Tortious Interference

If someone has improperly disrupted your business relationships.

Breach of Fiduciary Duty

If a certain kind of trusted individual has betrayed your trust.

Breach of Contract

This could involve violations of employment agreements, NDAs, or other contracts.

Fraud

If deceit was involved in obtaining the trade secrets.

Unfair Competition

Deceptive and misleading business practices.

Patent Infringement

If the stolen trade secrets include patented inventions or innovations.

Copyright Infringement

Sometimes, stolen trade secrets also involve copyright violations, like unauthorized use of software or design documents.

BEST PRACTICES FOR MANAGING TRADE SECRETS

 Protecting your trade secrets doesn't end with identifying them. It’s crucial to have robust practices in place so your rights are less vulnerable to challenge if you need to bring claims or wish license trade secret rights:

 Identify

Clearly document what constitutes a trade secret in your business. This includes technical data, processes, customer lists, and more.

Preserve

Implement strong security measures, such as encryption, restricted access, and physical security controls. Regularly update these measures to adapt to new threats.

Manage

Use non-disclosure agreements and confidentiality clauses in contracts with employees, contractors, and business partners. Conduct regular training sessions to ensure everyone understands the importance of trade secret protection.

Audit

Regularly review your practices and update them as necessary. This includes monitoring access to sensitive information and investigating any suspicious activities.

LICENSING TRADE SECRETS

It's also worth noting that trade secrets can be valuable assets not just to protect, but also to leverage. Licensing your trade secrets can be a significant revenue stream, offering your innovations to others under controlled conditions while still maintaining their confidentiality.

At Ganz Law, PC, we can help you navigate the complexities of licensing agreements to maximize the value of your trade secrets while safeguarding your interests.