Updated: Dec 12, 2022
Protecting Yourself From Trade Secret Theft In California
When you have something that gets you ahead of the competition, you'll want to safeguard it. Although trade secrets aren't tangible things, they still hold so much value for someone's business. That said, trade secrets are protected from theft in California, and any violations of such can be settled through the assistance of a West Covina Business Law Attorney.
Intellectual property (IP) is a broad word that refers to various intangible personal property types that are subject to ownership and other legal rights under state and federal laws in the United States and most other countries. Among the safeguards available are trade secrets, patents, copyrights, mask works, and trademarks.
Trade secrets protect particular sorts of proprietary information. So long as the property meets the definition of a trade secret and the owner takes the necessary steps to protect its secrecy, this type of IP protection can provide such information with the most long-lasting legal protections for intangible personal property.
What Are The Applicable Laws On Trade Secrets?
The Economic Espionage Act, revised in 2016 by the Defend Trade Secrets Act of 2016 ("DTSA"), protects trade secrets at the federal level in the United States. Trade secrets are protected at the state level by state trade secret statutes and common law.
In summary, California's UTSA expands trade secret protections, provides enhanced damages where misappropriation is established and enables for additional costs to be recovered when a plaintiff successfully sues to protect its trade secret rights.
Importantly, the inevitable disclosure doctrine is not recognized by California law. Before discovery can commence, a plaintiff must describe the trade secrets at issue in the case in sufficient detail for the defendants to understand what they're defending against.
If you need more information on the specific laws that protect you, contact a West Covina Business Law Attorney in California to help you out.
How Are Trade Secrets Defined?
Trade secret protections apply broadly to business, financial, and technical information – such as client lists, marketing plans, pricing, and discount structures, manufacturing processes, chemical formulas, and software source code – that meets the following criteria under both federal and state law:
Outside of the owner's organization and control, the information is not widely recognized or ascertainable.
The owner receives economic value or competitive advantage from the information that is not widely recognized.
The trade secret owner makes reasonable efforts to keep the information private.
A company's data or databases may also be protected as trade secrets. Copyright laws may provide independent protection for trade secrets, and patent applications may be filed to safeguard them.
Computer source code, for example, can be protected as a trade secret. It can also be both protected by copyright and encapsulate a patentable invention.
Trade secret protection, on the other hand, may be lost if a deposit and public exposure of source code are made in connection with copyright registration in the source code, and it will be lost if a patent is issued on the software program or if the patent application is published.
So, before you consider registering trade secret information with the United States Copyright Office or seeking patent protection for that information with the United States Patent Office, you should first understand your business goals and consult with an experienced West Covina Business Lawyer to ensure you are on the right track.
Protecting and Keeping Trade Secrets
Under federal or state law, no official registration system is in place to protect your trade secrets. Trade secret rights are solely safeguarded and maintained by the owner making reasonable steps to protect the information's secrecy:
Employees and independent contractors within the owner's organization.
Customers, suppliers, lenders, joint ventures and merger partners, and prospective acquirers are identified third parties who need to utilize or examine the information.
This is usually done by putting in place proper security measures at the owner's facilities and computer networks and using written confidentiality agreements.
Depending on the circumstances, any variety of confidentiality agreements can be employed, including ordinary commercial transactions, employer-employee interactions, merger and acquisition activities, and financing and loan operations.
Trade secrets do not require legal notice. Nonetheless, it is advisable to label papers as "secret" or "confidential" in whatever tangible or intangible manner they exist, both to illustrate the owner's attempts to maintain confidentiality and deter misuse by providing a genuine warning.
However, to help you organize your documents and resolve any issues with them, contact a West Covina Business Law Attorney to help you.
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