Do You Suspect Misappropriation of Trade Secrets?

Every industry and business has its own unique way of doing things, as well as inside information relating to its products or services that give it a competitive advantage. This proprietary information is considered a trade secret, and because trade secrets are so valuable to a business, many business owners and managers are preoccupied with protecting their trade secrets at all costs. It can be devastating to lose a trade secret and can even drive a business into bankruptcy. If you suspect misappropriation of trade secrets in your business, the proper response might be business litigation with a competent company attorney.

Incentives for Trade Secret Misappropriation

A misappropriation simply means someone is improperly handling or disseminating proprietary business information, including formulas, recipes, client lists, software code, and more. This might be deliberate and malicious, or it might be accidental or out of carelessness, but the effect of a lost trade secret is damaging either way. From the perspective of a person who is deliberately misappropriating a trade secret, it’s usually because of financial gain. Either they are paid to disclose the secret in an illegal bribe from a competitor, or they can use this information to start a competing enterprise with an unfair advantage.

Protecting Your Trade Secrets

Before you can claim misappropriation, you need to be able to prove that you took reasonable steps to protect your trade secret. For example, if you put your proprietary methods on an online blog accessible to anyone, and a former employee starts a competing business based on your methods, this might not be a valid business litigation opportunity. You want secrets under restricted access through physical locks, passwords, and the like. You should also have agreements in place, such as employee and independent contractor agreements, that specifically state they cannot disclose confidential information. These are reasonable steps toward protecting your trade secret.

The Act of Intellectual Property Theft or Misappropriation

What means did the suspected employee, contractor, or third party use to gain access to your trade secret? You only have legal recourse for business litigation if the other party used improper means to access, use, or disclose the intellectual property. Violating an agreement is one of the most common instances of misappropriation, where someone is provided confidential information in exchange for a contractual obligation not to reveal it. Other types of misappropriation include accessing information you were never authorized to see, such as hacking into a business email account or financial records.

In the event that you suspect misappropriation, the first step is to talk to a litigation expert that specializes in intellectual property and trade secret law. A good litigation attorney can advise you on the likelihood of an actual misappropriation and whether you have decent grounds for business litigation.

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2 Responses to "Do You Suspect Misappropriation of Trade Secrets?"

  1. homeschool

    Thanks very interesting blog!

  2. Newport

    Great blog post. It’s useful information.

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