Companies sometimes dismiss trade secrets as a significant form of intellectual property because unlike patents, copyrights or trademarks, trade secrets are not publicly recognized or registered with the government. Indeed, every aspect of the trade secret depends on just that, secrecy. Once a trade secret becomes known, the value is lost (and a business generally suffers). Fortunately, California has laws in place to protect trade secrets.
Common examples of trade secrets include client lists, company-specific marketing information, inventions (even if they aren’t patented), software, formulas or recipes, techniques, and processes. However, this list isn’t all inclusive. Speak with experienced legal counsel about other items that may be considered a trade secret in California.
Just because something is used in a business doesn’t necessarily make it a trade secret. Generally speaking, there are some conditions that may apply that could qualify something as a trade secret:
– The information isn’t known outside of the business;
– The information is known only to employees or others within the business;
– The company has taken reasonable measures to protect the secrecy of the information;
– The information is considered valuable;
– The information isn’t common — it would be hard for others to duplicate it on their own.
Your business information, process, or procedure may also be protected under California law if it is included in a non-disclosure agreement.
What Happens If Your Trade Secret is Shared?
To answer this question, we will first presume that what was shared is definitely considered a trade secret. Theft of trade secrets is referred to in California as misappropriation and is defined as the acquisition of a trade secret by someone who knows or has a reason to know that the trade secret was acquired by improper methods such as bribery, theft, misrepresentation, breach or inducement to breach the duty of secrecy. Often, this is done by a former employee or a competitor.
The person who misappropriated the trade secret may be prevented from sharing it by a court of law by the issuance of an injunction but the injured party must act fast. The owner of the trade secret may also be eligible to receive financial compensation. The financial compensation can be no more than the actual loss of money caused by the misappropriation or the profits the other person received from using the stolen trade secret (a concept known as unjust enrichment).
To learn more about trade secrets in California, speak with experienced trade secrets attorney Drew E. Pomerance today.