Trade secrets are a massively important form of intellectual property. And they are stolen or misused far more often than you may realize. An employee might swipe your customer as he leaves for a new job. A vendor might use your business strategies to help one of your competitors. A joint venturer might exploit your technology for its own benefit.
When someone misappropriates your business’s trade secrets, it is critical that you take swift, decisive action. Though some cases can be resolved without court intervention, legal action may be needed to prevent devastating harm to the business and recover its losses.
To prevail in court, a trade secret plaintiff must first prove that the information was, in fact, a trade secret under the law. This can be more challenging that it seems. How does a company show that its information counts as a trade secret entitled to protection?
Proving the Information is Protectable as a Trade Secret
First your business will need to prove that its information is protectable. In many cases (not all) this will be the easy part. Pretty much any valuable information is eligible for trade secret protection, provided it is robust enough and has not been publicly disclosed.
The following are examples of information that might qualify as trade secrets:
Proving the Information Has Competitive Value
Though any type of information can qualify as a trade secret, it must have economic value. And this value must derive from its not being known or discoverable by your competition. Simply put, trade secrets are secrets that your competition could profit from knowing.
To determine whether information meets this standard, courts look at the value it has to the owner and competitors, the effort and money that went into developing it, and how difficult it would be for others to develop the same information, among other things.
Proving Your Company Took Steps to Ensure Secrecy
To qualify as a trade secret, your business must, well, keep it a secret. More specifically, an owner must prove it made reasonable efforts to protect its information from disclosure. This seemingly simple point is often hotly contested; it can make or break a trade secret case.
The measures each company takes will vary. To take a famous example, it is said that the formula for WD-40 is locked away in a bank vault that can only accessed by select individuals. Though this particular method will not be appropriate in every case, the concept is right: You need to limit access and set up barriers against disclosure.
Some measures to consider to protect your business information include the following:
Though an NDA is not the only way to protect your information, putting an NDA in place is one of the clearest and most easily enforceable ways to ensure confidentiality. An experienced trade secret attorney can craft NDAs tailored to the specifics of your business and provide guidance in putting other appropriate, enforceable measures in place.
Enforcing Your Trade Secret Rights in Court
Like most states, Michigan has adopted its own version of the Uniform Trade Secrets Act (UTSA), which prohibits parties from wrongfully disclosing or using the trade secrets of another. Federal law also provides a cause of action for trade secret misappropriation and includes enhanced remedies. If you believe that someone has misappropriate your business’s trade secrets, you should take immediate action. Time is of the essence.
Sometimes it’s best to start with a cease-and-desist letter demanding that the target stop using your information and return or destroy all copies in his or her possession. Other times, it will be necessary to file a lawsuit right out of the gate. Many trade secret cases begin with a motion seeking an immediate injunction to halt any further misappropriation.
Contact the Premier Trade Secrets Law Firm in Michigan
Trade secrets are a precious asset. Businesses have been damaged and destroyed when their secrets fell into the wrong hands, whether through corporate espionage or a once-trusted employee or business partner. Take the necessary steps now to lock down your hard-won trade secrets. And be prepared for swift action if someone steals them.
At Maxwell Goss Law, we advise businesses on all aspects of intellectual property law and represent businesses and individuals in enforcing their rights. Contact us to schedule a no-cost strategy call to discuss the right steps to protect your business’s hard-won trade secrets.
Maxwell Goss Law Supports Birmingham Local History Project
Over a century after their deaths, details on the lives of two former slaves who settled in Birmingham, Michigan, and became esteemed members of the community were recently discovered. George and Eliza Taylor, deceased in 1901 and 1902, respectively, were the first African-Americans to own property in Birmingham. After escaping slavery in Kentucky through the underground railroad, the Taylors purchased a home on Bates Street in 1893 and became active members of United Presbyterian Church.
Unfortunately, the Taylors were buried in unmarked graves and their story was long forgotten. George Getchman, the historian who discovered the Taylors’ story, has joined with others to raise funds to sponsor a grave marker reading, “Born in slavery; died free in Birmingham.”
Maxwell Goss Law, based in Birmingham, has donated $500 for the Taylor Monument.
The firm’s owner, Maxwell Goss, learned of the effort through personal connections. “My father forwarded me an article about the Taylors and noted that they had been members of his church,” Goss said. “When I read it, I saw that the ‘local historian’ was my longtime dentist, whom I knew from our conversations to be involved with Birmingham history. And since my business is in Birmingham, it seemed only fitting to contribute to this worthy cause.”
According to The Oakland Press:
Contributions to the Taylor Monument Fund can be made online through a secure payment service with the Birmingham Museum/City of Birmingham here.
Checks can be made payable to “Friends of the Birmingham Museum-Taylor Monument Project” and mailed to: Birmingham Museum, 556 W. Maple Road, Birmingham, MI 48009.
Maxwell Goss Law brings forceful advocacy and creative solutions to high-stakes business disputes, with a focus on trade secret, non-compete, intellectual property, and shareholder litigation. Based in metro Detroit, the firm serves clients throughout Michigan and appears in courts nationwide.
This legal blog is written by attorney Maxwell Goss. Max practices business litigation, with a focus on non-competes, trade secrets, shareholder dispute, and intellectual property.