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David H. Schwartz May 15, 2020

According to the Uniform Trade Secret Act (UTSA), a trade secret is information that gives a company a competitive advantage over its competitors. As such, a company will make a considerable effort to keep the trade secret from getting out. In most instances, measures taken involve a type of legal contract between the company and an employee, partner, or other entity.

In legal terms, trade secret infringement is referred to as trade secret misappropriation. This occurs when a former employee acquires a trade secret through improper or illegal means and discloses it without consent from the parent company. The misappropriation may happen intentionally or by mistake. In either case, the company may have a right to bring legal action against the offender.

The Law Offices of David H. Schwartz is proud to serve clients in Oakland, Alameda County, San Mateo, Santa Clara, San Jose, and throughout the San Francisco Bay Area.

What is a Trade Secret?

Companies in the San Francisco, California area may assume their core ideas, practices, property (including intellectual property), or files are trade secrets. However, they may not be protected under state law. California Civil Code § § 3426-3426.11 defines a trade secret as:

  • Valuable to the company

  • Not publicly known

  • Actively protected by the company

Companies must take tangible measures to demonstrate that they have protected a trade secret. Furthermore, they must provide documentation of these measures, as well as a clear classification of a trade secret.

How to Win a Trade Secret Misappropriation Lawsuit

Most lawsuits that companies bring against former employees rarely win because claimants either fail to classify and document their trade secrets or fail to appropriately protect the trade secret. To win a trade secret a company must do the following:

Classify the Information as a Trade Secret

To classify information as a trade secret, the information must meet all of the California statute criteria stated above. The information must be valuable, private, and protected by the company. Failure to adhere to California laws can disqualify a company from filing a lawsuit against an employee even if a contract was signed.

Make Sure the Information is Specific to the Company

In some industries, a trade secret may actually be common knowledge throughout the industry. A company may believe that their secret is unique to their organization or their brand. However, they may find out that the information is standard across the industry. In other words, all other companies are using the same information.

Make an Effort to Protect the Information

There are numerous ways that a company can leak information, thus making it public and not private. Therefore, a company should take extra precautions to secure and protect the information. Furthermore, they should document their procedures for securing their trade secrets.

Filing a Lawsuit Against a Former Employee

To win a lawsuit, a San Francisco company must establish that a former employee stole information or shared company files. The first step toward litigation is to hire a business litigation attorney. An attorney can help a claimant in the following ways:

  • Provide legal consultation and guidance throughout litigation

  • Conduct a comprehensive investigation to establish the facts of the case

  • Gather evidence of misappropriation by the former employee

  • Build a solid legal strategy against the former employee

  • Negotiate a settlement with the defendant

Commercial Litigation Attorney in the San Francisco Bay Area

The Law Offices of David H. Schwartz provides legal services in cases involving trade secret misappropriation. As an attorney with over 45 years of experience, David is an is committed to defending the rights of companies who have been unfairly treated by previous employees. The Law Offices of David H. Schwartz represents clients in San Francisco, San Jose, San Mateo, Santa Clara, Oakland, and Alameda County, California.