Understanding what constitutes trade secret misappropriation

| Jan 11, 2021 | Trade Secret Litigation |

Research suggests that the biggest threat to a business’s intellectual property is often right under the owner’s nose. Most modern allegations of information theft involve members of an employer’s own workforce. Trade secret litigation is often complex and time-consuming. Developing a better understanding of California’s trade secret misappropriation laws is important for anyone considering taking on a related case.

What constitutes a trade secret

In California, a “trade secret” could be something that gives a company a competitive edge, such as a secret recipe or formula. It could also be any type of information an employer makes an effort to keep confidential and protect.

What constitutes misappropriation

Most instances of trade secret misappropriation fall into one of two categories. Gaining access to trade secrets through improper or unethical means may constitute trade secret misappropriation. Using or disclosing trade secrets to one’s benefit may also fall under this umbrella.

The California Uniform Trade Secrets Act

The California Uniform Trade Secrets Act is California’s version of the Uniform Trade Secrets Act. It dictates when and how employees may be guilty of trade secret misappropriation. The act specifies that employers may be able to hold workers accountable for trade secret misappropriation even if they did so from memory, rather than by physically securing sensitive information.

In this digital age, employers should take every precaution to safeguard sensitive information and decrease the chances of an employee misusing it. An effective method of helping protect trade secrets includes making all hires sign confidentiality contracts. Maintaining electronic safeguards that limit access to intellectual property is another.

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