What Is A Trade Secret?What Is A Trade Secret?

Trade SecretsTrade SecretsAre Are

Property:Property:

Intellectual PropertyIntellectual Property

A Trade Secret IsAnything That:

(1) Has Economic Value Because It Is Not Generally Known

(2) Was Subject To Reasonable Efforts Under The Circumstances To Maintain Its Secrecy

• Including compilations of known information, if the compilation is not generally known

• Provides competitive advantage

• Not readily discoverable by legitimate means

Other Means Of Spotting Potential Trade Secrets

• Did My Employer Pay Its Employees To Develop The Information?

• Would My Employer Be Upset If I Disclosed The Information To Its Competitors?

What Is Misappropriation?What Is Misappropriation?

• Directly Or Indirectly Acquiring A Trade Secret Through Improper Means

• Disclosing Or Using (Without Consent) A Trade Secret Acquired Through Improper Means

• Disclosing or Using (Without Consent) A Trade Secret Acquired Under Circumstances Giving Rise To A Duty To Maintain Its Secrecy Or Limit Its Use

• Disclosing Or Using (Without Consent) A Trade Secret You Knew Or Should’ve Known Was Acquired By Accident Or Mistake

- i.e., theft, bribery, misrepresentation, breach of duty, etc.- Reverse engineering or independent derivation is not improper, BUT

the people doing this work cannot have had any access to the trade secret information

- Common law duty, i.e., employer-employee relationship- Contractual duty, i.e., employment agreement, confidentiality

agreement, etc.

Does It Matter That My Former Employer Is Not Using Its Trade Secrets?

• No.• Can Someone Take Your Property Simply Because You Are Not Using It?

Does It Matter How Old The Trade Secret Is?• No• Classic Example Of An “Old” Trade Secret?

The formula for Coca-Cola

Does It Matter Whether The Trade Secret Is Patentable?

• No.

• Patent Law And Trade Secret Law Are Very Different, Although Some Concepts Are Similar.

Why Should I Care About Why Should I Care About Misappropriating Trade Misappropriating Trade Secrets?Secrets?

• You Jeopardize Your New Employer’s Property Rights

• You Are Personally Liable:A. Civil Lawsuit

B. Criminal Penalties

- Damages, lost profits, unjust enrichment

- Double damages and attorney’s fees exposure for intentional misappropriation

- It’s a federal crime- You can go to jail, although prosecutions

are still rare

InventionsInventions

Who Owns Inventions?Who Owns Inventions?

Employers Own Inventions Conceived Or Reduced To Practice During The Course Of The Employment

What About Inventions Conceived Or Reduced To Practice After-Hours, Based On The Work Performed For The Employer?

The Employer Owns It.

What About Inventions On A Subject Entirely Different From My Employer’s Line Of Work, Developed Without Use Of Company Time, Equipment, Or Materials?

You Own It.

What About Inventions On A Subject Entirely Different From My Employer’s Line Of Work, If I Used Some Company Time, Equipment Or Materials?

•You May Still Own It, But The Employer May Also Have “Shop Rights” That Allows Them To Use It Too.

What About Inventions Derived From Another’s Trade Secrets Without Their Consent?

•They May Own It

•You May Not Have Any Rights To It

•You May Be Liable For Trade Secret Misappropriation

What Knowledge Can I Use When I Change Jobs?

•Only General Skill And Expertise- NOT

Specific Knowledge Of R & D, Processes, Trade Secrets, Etc.Review Your Agreement(s) With Your Former Employer

Won’t That Make It Harder For Me To Change Jobs?

•Yes. Always Be Careful About Accepting A Job That May Require Inevitable Disclosure Or Use Of Another’s Trade Secrets.

Doesn’t California Allow Me To Compete Against A Former Employer?

•Yes, But You Cannot Compete Using Your Former Employer’s Trade Secrets

•A Court Can Prevent You From Working In A Position That Would Require You To Inevitably Disclose Or Use Another’s Trade Secrets

Is There Anything Special I Should Do When I Change Jobs?

•Return All Employment-Related Documents To Your Employer

•Do Not Keep Copies

What If I Have Questions Or Concerns?

•Contact- Supervisor- Human Resources Administrator- Any Officer