What is Trade Secret Misappropriation?
Trade secret misappropriation occurs when a trade secret has been wrongfully taken or disclosed without consent.
A trade secret is defined as information (1) that derives independent economic value from not being generally known, and (2) which has been the subject of reasonable efforts to be kept a secret. Misappropriation of a trade secret can happen through a breach of nondisclosure agreements, publication, theft, fraud, or bribery.
There are a number of defenses to trade secret misappropriation. An alleged wrongdoer might argue that it independently developed the trade secret.
Or it might argue that it reverse engineered a trade secret through testing (in order to identify the ingredients in a secret formula for a sports drink, for example). Or it may argue that there was no trade secret to misappropriate, either because the supposedly secret information was not actually secret, or because the owner of that information did not take adequate steps to keep it secret.
Once a trade secret is misappropriated and broadly disseminated, it generally loses its status as a trade secret and is thus no longer protected. It is therefore critically important to guard trade secrets closely. If you own trade secrets, get legal advice regarding measures you should take to adequately protect them.
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