![]() Studious ignorance of the circumstances surrounding the acquisition of the trade secret information will not necessarily shield the acquirer from liability.Īmong the facts relevant in establishing the acquirer's actual or constructive knowledge include the security measures taken to protect the trade secret information and the customs and practices in the industry to keep such information secret. If based on the known facts, a reasonable person would have inquired further to ascertain whether the trade secret information was acquired by improper means, this will satisfy the "reason to know" standard. Attempts to steal trade secrets or conspiracies to steal trade secrets also fall within the ambit of "improper means."Īt the time of acquisition, if the acquirer "knows or has reason to know" that the trade secret was acquired by improper means then the acquirer is liable for trade secret misappropriation. The Economic Espionage Act of 1996 (EEA) defines the theft of trade secrets to include instances where one steals, or without authorization appropriates, takes, carries away, conceals, or by fraud, artifice, or deception obtains trade secret information or without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates or conveys trade secret information or receives, buys or possesses trade secret information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization. The UTSA and DTSA define "improper means" to include theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. It is the use of "improper means" to procure the trade secret rather than the mere copying or use of the trade secret that creates liability for trade secret misappropriation. Likewise, independent reverse engineering of the trade secret is not actionable. Independent development of the trade secret is not actionable. ![]() The lawful acquisition of a trade secret is not actionable. Unauthorized acquisition of a trade secret requires proof of five elements: (1) a trade secret (2) acquisition (3) by improper means (4) by a person (5) who knew or had reason to know that the trade secret was acquired by "improper means." (C) Before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. Derived from or through a person who owed a duty to a person seeking relief to maintain its secrecy or limit its use or Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use or Derived from or through a person who had utilized improper means to acquire it (B) At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was (A) Used improper means to acquire knowledge of the trade secret or (ii) Disclosure or use of a trade secret of another without express or implied consent by a person who: (i) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means or The Uniform Trade Secrets Act (UTSA) and Defend Trade Secrets Act (DTSA) define misappropriation as follows: There are three main avenues for establishing misappropriation of a trade secret: unauthorized acquisition, unauthorized disclosure, or unauthorized use of the trade secret. For example, if the plaintiff alleges that A is the trade secret, but the evidence shows that the defendant appropriated B not A – there is no valid trade secret misappropriation claim for A. Further, there must be a causal link between a "trade secret" and the "misappropriation" of the trade secret. Without evidence of the EONA proofs there cannot be a valid trade secret misappropriation claim. Proof of an alleged trade secret requires the EONA proofs: Existence, Ownership, Notice and Access. ![]() Proof of a "trade secret" precedes "misappropriation." If there is no "trade secret" then there can be no "misappropriation." This error is often fatal to plaintiff's trade secret misappropriation claim. The plaintiff alleges nefarious acts of "misappropriation" without evidence of a trade secret. This is the mistake that many plaintiffs make in trade secret misappropriation lawsuits. JThere is no such thing as "trade secret infringement." The cause of action is "trade secret misappropriation." There can be no cause of action for trade secret misappropriation without proof of at least one alleged trade secret.
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