Intellectual Property | Real Estate | Technology | Software

Trade Secrets

Vondran Legal – Trade Secret protection, enforcement, arbitration and litigation

UTSA lawyer California

Introduction

A trade secret can be one of a company’s greatest intellectual assets.  Just think about the Coke “secret formula” or Kentucky Fried Chicken’s “secret recipe.”  There are many different types of trade secrets and our intellectual property law firm can help you identify, protect and police your trade secrets in a competitive marketplace that’s literally gone wild with the internet and the ability for ex-employees to start new startup businesses!

What is a “trade secret” under California law?

Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210, 220-21, 109 Cal. Rptr. 3d 27, 38 (2010) discussed the California Uniform Trade Secrets Act:
“CUTSA defines “[t]rade secret” to mean “information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (See Cal Civil Code §3426.1, subd. (d), italics added.)
The sine qua non of a trade secret, then, is the plaintiff’s possession of information of a type that can, at the possessor’s option, be made known to others, or withheld from them, i.e., kept secret. This is the fundamental difference between a trade secret and a patent. A patent protects an idea, i.e., an invention, against appropriation by others. Trade secret law does not protect ideas as such.

Indeed a trade secret may consist of something we would not ordinarily consider an idea (a conceptual datum) at all, but more a fact (an empirical datum), such as a customer’s preferences, or the location of a mineral deposit. In either case, the trade secret is not the idea or fact itself, but information tending to communicate (disclose) the idea or fact to another. Trade secret law, in short, protects only the right to control the dissemination of information.”

 A trade secret can potentially last forever, while a patent will eventually merge into the public domain.

Theft of trade secrets jury instruction – CACI 4400

What does it take for a Plaintiff to prove theft of a trade secret?  Here are the jury instructions in California (we serve Clients in Arizona and California):

4400 Misappropriation of Trade Secrets—Introduction
1.  [Name of plaintiff] claims that [he/she/it] [is/was] the [owner/licensee] of [insert general description of alleged trade secret[s]].
Attorney Steve Tip:  As one Court put it: “It is critical to any CUTSA cause of action—and any defense—that the information claimed to have been misappropriated be clearly identified.  Accordingly, a California trade secrets plaintiff must, prior to commencing discovery, “identify the trade secret with reasonable particularity.” (Code Civ. Proc., § 2019.210 (§ 2019.210); see M. Lemley, The Surprising Virtues of Treating Trade Secrets as IP Rights (2008) 61 Stan.L.Rev. 311, 344 [plaintiff should be required to “clearly define what it claims to own, rather than (as happens all too often in practice) falling back on vague hand waving”.  See Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210, 221, 109 Cal. Rptr. 3d 27, 38 (2010), as modified on denial of reh’g (May 27, 2010) disapproved of by Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 246 P.3d 877 (2011).
2.  [Name of plaintiff] claims that [this/these] [select short term to describe, e.g., information] [is/are] [a] trade secret[s] and that [name of defendant] misappropriated [it/them].
“Misappropriation” means the improper [acquisition/use/ [or] disclosure] of the trade secret[s].
3.   [Name of plaintiff] also claims that [name of defendant]’s misappropriation caused [[him/her/it] harm/ [or] [name of defendant] to be unjustly enriched].
California has adopted the Uniform Trade Secrets Act (“UTSA”) which codifies the basic principles of common law trade secret protection. Cal.Civ.Code §§ 3426–3426.10 (West Supp.1993). To establish a violation under the UTSA, it must be shown that a defendant has been unjustly enriched by the improper appropriation, use or disclosure of a “trade secret.”  See MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 520 (9th Cir. 1993).
4.  [Name of defendant] denies [insert denial of any of the above claims].
5.  [Name of defendant] also claims [insert affirmative defenses].

Software audits and corporate sabotage by “secret informants”

For software audit cases sometimes the informant may disclose protected elements of a database that can be a trade secret.  In these cases, an injunction against the “secret informant” may be necessary.  See MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 521 (9th Cir. 1993) which held: “We agree that the Customer Database qualifies as a trade secret. The Customer Database has potential economic value because it allows a competitor like Peak to direct its sales efforts to those potential customers that are already using the MAI computer system. Further, MAI took reasonable steps to insure the secrecy to this information as required by the UTSA. MAI required its employees to sign confidentiality agreements respecting its trade secrets, including the Customer Database. Thus, under the UTSA, the MAI Customer Database constitutes a trade secret.”   Click on the link in this paragraph to read our article on this topic.

We can help with the following types of legal issues

Our intellectual property law firm can help you with the following types of cases involving trade secrets:

1.  Trade secrets audits;

2.  Trade secret protection programs;

3.  Software audit – trade secret corporate espionage by BSA informant

4.  Trade secret arbitration;

5.  Breach of non-compete agreements.

We can represent both Plaintiff and Defendants in trade secret cases which may also involve unfair competition, interference with contract or prospective business advantage, copyright and other legal issues.

Contact a California trade secret law firm

For more information about our services contact us at (877) 276-5084.  We offer flat rate legal fees for many non-litigation cases and we have over a decade of experience in litigating in the State and Federal Courts.  See our Federal Court experience here.  We have offices in San Diego, Newport Beach (Orange County), Beverly Hills (Los Angeles), San Francisco (serviing San Jose, Silicon Valley and the Bay area) and Phoenix, Arizona.