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Trade Secret Enforcement

What is a trade secret?

A trade secret is any information used in commerce that the owner has taken reasonable measures to keep secret, from which the owner derives independent economic value and such information not being readily ascertainable by the public. Such trade secrets are afforded legal protection against theft as long as the owner continues to derive commercial value from it (as opposed to patents which usually only provide up to 20 years of protection).

18    U.S.C. § 1832: Theft of Trade Secrets

a)   Whoever, with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly—
(1)   steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3)  receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
(4)   attempts to commit any offense described in paragraphs (1) through (3); or
(5)  conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy, shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.

b) Any organization that commits any offense described in subsection (a) shall be fined not more than the greater of $5,000,000 or 3 times the value of the stolen trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organization has thereby avoided.

Based on trade secret misappropriation cases filed over the last 10 years, 40% of cases dealt with former employees taking trade secrets with them over to their new employers while 25% of cases dealt with suppliers, consultants and vendors misusing trade secrets disclosed to them in due course of business. Interestingly, cyber-criminals and hackers constituted only 15% of trade secret theft, while the remaining 20% were attributable to actions by current employees at companies where the theft occurred. These numbers highlight the need for not just technical solutions (effective most against cyber-criminals and hackers) but also (and even more so) legal and procedural solutions to protecting trade secrets before, during and after the secrets are willingly disclosed to employees and vendors.

Our trade secret management and enforcement helps companies protect their competitive advantage through trade secrets and their trade secrets through technology.

         DEFINE commercially valuable trade secrets owned by the company, the date of origination, creators as well as employees and vendors that               have been given access to individual trade secrets.

         MARK documents that contain trade secret information providing ample notice to a recipient of the confidential nature of the document.

         DISSEMINATE to all current and new employees and vendors the nature and importance of trade secrets that will be disclosed to them, and             insert trade secret provisions in contracts.

         MONITOR continuously the activities and association of current and former employees and vendors with competitors and litigate when                     necessary.

We have also leveraged our source code review capabilities to help clients achieve success in several high-tech trade secret cases covering:

  • Power Management

  • Enterprise Software

  • Embedded Systems

  • Web Browsers and Applications

  • Cryptography

  • Data Compression

  • Content Management Systems

  • Video Surveillance Systems

  • Image Processing

  • Semiconductor Memory Management