Trade Secret Misappropriation – Protecting your Business
Trade secret misappropriation is a critical threat to business owners. A business’ trade secrets are what give it a competitive advantage among its competitors. It is confidential information that a business derives an economic commercial benefit from. Trade secrets can come in the form of recipes, formulas, patterns, designs, processes, practices, forms and many others.
As a form of intellectual property, trade secrets are protected under both state and federal law. Florida has enacted the Florida Uniform Trade Secrets Act which provides, among other things, damages and injunctive relief for actual or threatened misappropriations of trade secrets as well as attorney’s fees in circumstances where willful and malicious acts of misappropriation exist.
In order to qualify for trade secret protection under state and federal regulations, the information being claimed by a business to be a trade secret must be truly confidential and proprietary, it must offer a tangible competitive advantage with a commercial value, and the trade secret holder must take reasonable steps to protect their confidential information. If any of those criteria are not met, then legal protection may not apply.
When a businesses’ trade secret is misappropriated, there are certain remedies that a business can pursue against the misappropriating party. Depending on the nature of the claim, the following are some of the most common remedies that are available for a business to pursue:
- Injunctive Relief: A court can issue an injunction, ordering a party to refrain from taking a specific action or, alternatively, forcing a party to take a specific action. In the case of trade secrets, a court can provide injunctive relief to stop continued misappropriation and to preserve the secrecy of a businesses’ sensitive information.
- Actual Damages: Courts have the authority to award a plaintiff financial compensation for the actual economic damages they have incurred as a result of a trade secret misappropriation. Calculating these damages can be challenging as they can range from a businesses’ actual quantifiable financial losses to estimated loss of profits.
- Attorneys’ Fees/Legal Costs: In some cases, courts may award victims of trade secret misappropriation attorneys’ fees or court costs. Since this remedy is not mandated by statute, in Florida, courts will typically only award this remedy in cases where the defendant is found to have acted in a willful or malicious manner.
In some cases, there could also be federal criminal charges brought against a party who steals trade secrets from a business.
Even though these financial awards and court orders can help compensate a business for its losses, unfortunately, they cannot undo the damage caused by the released information. This is why businesses must protect their trade secrets in a proactive manner. Some tips for business owners to take into account when seeking to protect their trade secrets are:
- Know which of their businesses’ information is eligible for protection under state and federal laws.
- Have employees, contractors and any other parties that will have access to the businesses’ trade secrets sign comprehensive and strict confidentiality and non-disclosure agreements.
- Despite implementing the use of confidentiality and non-disclosure agreements, whenever possible, businesses need to limit access to their trade secret protected information as much as possible to all parties that are a part of their business operations. If an employee does not need to know this sensitive information in order to effectively accomplish their work then they do not need to have access to such information.
- In the event that a business owner believes that a trade secret misappropriation may have occurred they need to take immediate action to protect their rights, as the spread of the misappropriated information could be devastating to their business.
It is important to hire an attorney that understands the complexities involved in a misappropriation of trade secrets case. If your business is considering filing a claim for trade secret misappropriation or if you are facing a lawsuit for alleged trade secret misappropriation, we are available to help. We offer both in-person and virtual consults, please feel free to call our office at 305-460-0145 to schedule a consultation.