Theft of Trade Secrets

A trade secret is also called confidential information in some sectors or industries. The first US trade secret theft case was back in 1868 in Massachusetts, so it is really not that new of an area of law as one would think with the advance of technology. The majority of states have adopted some sort of uniform trade secrets law (also know as the Uniform Trade Secret Act UTSA). This was in an effort on behalf of intellectual property litigators and others who sought to provide some consistency in trade secret law that was previously only protected by state laws. Texas is one of the few remaining states that protect trade secrets under common law and state statutes. In addition to state protection, there is now also federal protection of the trade secrets by 18 USC 1832.

Generally, the UTSA defines a trade secret as confidential information that may be in the form of a formula, program, pattern, device, compilation, method, process, or technique. This information has usually been treated with reasonable efforts to maintain its secrecy. A trade secret also has some sort of economic value that if stolen would give an edge to a competitor by its use or possession. There was an example in recent years of attempted trade secret theft when a Pepsi Cola Co employee tried to sell the Pepsi secret formula to a Coca Cola Co employee.

Secrecy must be maintained to keep the trade secret status and protection under these laws. Using confidentiality agreements is one way to maintain secrecy in business deals and discussions, as well as, allowing only employees who must know the information to have any access to it, and keeping the information in a secured environment. It is important to maintain the trade secret status, so you have a legal cause for action to recover damages and obtain an injunction to stop and prevent further use if the information is obtained and used against your permission.

It is important to note that there is a risk associated with maintaining trade secret protection. By keeping the trade secret protection, you forfeit other forms of intellectual property protection, like patents and copyrights that require registration and disclosure. An advantage of the registration is the proof of ownership it provides at the time of registration. Whether trade secret, patent, or copyright, if there is a legal issue, you will need to be able to prove your ownership of the materials in question in order to maintain rights and recover any damages. Often the battle is that another party is claiming ownership. It must be proven that you originally created and owned the trade secret without any doubt and the dates of creation and abduction must be very clear. There are two simple and inexpensive ways to prove your creation and ownership of the trade secret. One is by mailing the information to yourself and retaining the postmarked, sealed envelope. Or, alternatively, you can deposit a copy of the information with a source code escrow company that would maintain a dated copy of the information in storage.

If you have been a victim of trade secret theft, contact The Pursley Law Firm to see how we can assist you in recovering your property.

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