Trade Secret Lawyer in San Diego

Trade Secrets

The success of many a business rests on its possession of a secret that allows it to offer a unique product. Expose the secret and the product may quickly lose its uniqueness. Think Coca-Cola. Think Kentucky Fried Chicken. Contact a San Diego trade secret attorney with any legal questions or concerns. Any business with a trade secret is engaged in a low level war of business torts: it wants the secret to stay secret and competitors want to know the secret. Millions, maybe billions of dollars ride on the outcome. Given the stakes, it shouldn’t be surprising that industrial espionage is a thriving business, or that trade secret law is a very active, if little known field.

What Are Trade Secrets?

In plain English, a trade secret is any information of commercial value which the owner of the information has undertaken to keep secret. It isn’t always easy to tell if something is a trade secret, but courts have tended to consider three factors: Courts usually consider the following three factors in determining whether you have a trade secret:

• How valuable the information is to the business which owns it
• How strong an effort the owner has made to keep the information secret
• How much of the information is known to how many people, both inside and outside the business

Only the third factor can really be judged objectively. The value of the information and the efforts to maintain its secrecy necessarily involve looking at many circumstances and trying to reach a reasonable decision.

Why Not Just Patent It?

In most cases, a trade secret could be patented, so why doesn’t the secret’s owner just do that? The simple answer is that patenting it makes the information public and patent protection is neither foolproof nor permanent. Trade secrets, on the other hand, remain secret as long as the owner is successful in keeping it secret.

Laws Protecting Trade Secrets

There are laws protecting trade secrets in every state. The most common protection in modern law comes from the Uniform Trade Secrets Act (UTSA) which has been adopted in most states. Misappropriation may also be treated as a tort or a form of unfair business practices and competition.

When is a Trade Secret “Misappropriated?”

The laws protect the owner of a trade secret against “misappropriation” of the secret, generally meaning that no one can obtain the secret information by improper means, which includes a third party obtaining it from someone who got it by improper means. The common sense understanding of improper means includes trickery, outright theft, bribery of people with access to the secret, and similar actions. Of course, some people working in the owner’s business will know the secret. It is also misappropriation for a person in that position to disclose the secret in violation of a valid confidentiality agreement.

Damages

The damages for misappropriation of a trade secret are unusually comprehensive under the Uniform Act. The secret’s owner can obtain both the amount of the actual loss to the business and the amount by which the defendant was enriched by the misappropriation. To protect against “double recovery” by the owner, unjust enrichment damages exclude any amounts already taken into account in computing the owner’s loss. As an alternative to the above, the owner may recover the amount that would have been paid as a “reasonable royalty” for use of the secret. Punitive damages, limited to twice the actual damages, may be recovered if the defendant acted willfully and maliciously. The secret’s owner may also get an injunction against future misuse of the secret information.

When You Need Legal Assistance

Proving or disproving the factual elements of secrecy, value, and misappropriation can be tricky and time-consuming, but are essential to a trade secret case. If you suspect that your secret has been misappropriated, or are being accused of doing the misappropriation, give the Boyd Law Firm in San Diego a call. The attorneys at Boyd Law have a long track record of success in complicated business litigation, and are known as strong advocates for our clients. Your initial consultation is free and without obligation.