Trade Secret Misappropriation

Trade secret misappropriation occurs under two circumstances

First, when a person a) comes into possession of a trade secret b) of another, c) that the person knows or has reason to know d) was acquired improperly that person is liable for trade secret misappropriation.  For example, if an employee takes confidential information from his job home, and that violates protective measures put in place by his employer, such as a valid policy, that would constitute trade secret misappropriation.  Accordingly, the mere act of acquiring a trade secret improperly is sufficient; no use or publication is required.

Second, a person is liable for trade secret misappropriation when a) he discloses or uses a trade secret b) of another c) without the other’s consent.  This can occur even if the trade secret is acquired through a third person, as long as the disclosing or using party knows that the trade secret was acquired by the third person improperly.  For example, if documents come into the person’s possession that are labeled “Confidential” or “Secret,” this might be enough to give you reason to believe that they were acquired improperly.  Of course, in this day and age when it is common practice to label every email as “containing confidential and proprietary information of company X,” the circumstances would be very important.

Generally, the First Amendment does not give a media organization carte blanche to publish a company’s trade secrets without permission.  The case Ford Motor Company v. Lane, 67 F.Supp.2d 745 (E.D. Mich. 1999) addressed this squarely.  In particular, in Lane a reporter received photographs from a number of current and former Ford employees, and published the same.  The Court determined that despite the reporter not having a monetary interest in publishing the photos, he still violated had committed trade secret misappropriation, and was liable for damages.  Nonetheless, the Court also determined that the First Amendment prohibited the Court from ordering the reporter to take the photographs down.

Generally, when trade secret misappropriation is established, a number of different types of remedies can be obtained.  In particular, the following are often sought:

  • Injunctive Relief: All states allow a plaintiff to seek an injunction ordering a defendant to stop violating the plaintiff’s rights and to take steps to preserve the secrecy of plaintiff’s trade secrets.  Accordingly, a court can order a defendant to stop publishing a trade secret, or to stop using a trade secret.
  • Damages: A court can also order a court to pay money damages for the economic losses that result from trade secret misappropriation.  These damages can take many forms, including plaintiff’s losses and defendant’s profits, or a royalty.
  • Attorneys’ Fees: Most jurisdictions will order a defendant to pay the plaintiff’s attorneys’ fees if it finds that the defendant acted willfully or maliciously in violating the plaintiff’s trade secret rights.

At the Law Offices of Konrad Sherinian, LLC we have prosecuted and defended many trade secret cases with great success.  Contact us today if we can help you with a trade secret matter!