Can a court order someone to stop using a trade secret they misappropriated?
Absolutely. If misappropriation of a trade secret results in harm that cannot be fully compensated through money damages, then the court can issue an “injunction” – i.e., a court order prohibiting someone from taking a particular action.
Aside from showing an injury that cannot be compensated through the payment of money damages, a plaintiff must also show that the “balance of hardships” favors issuance of the injunction. In other words, the benefit that the plaintiff receives from the injunction must outweigh the harm or burden imposed upon the defendant. Finally, the injunction must be in the public interest.
In trade-secret cases, the injunction usually prohibits the defendant from disclosing or otherwise using the trade secret. If the defendant has incorporated the trade secret into its own products or services, the defendant can be prohibited from selling those products or services.
The duration of an injunction can vary. If the defendant can independently develop the technology or the trade-secret rights are extinguished (such as by public disclosure), the injunction may be time-limited. For example, if the defendant can show that it would have developed the technology without the misappropriation, the injunction will last only for the period of time the defendant would need to independently develop the technology. This is sometimes called a “head start injunction.”
Violations of an injunction are serious. If the defendant disregards the injunction, it can be held in contempt and forced to pay monetary penalties, among other consequences.
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