Trade Secrets Litigation: The Challenges of Protecting Proprietary Technology

Theft of trade secrets is a critical and pressing problem for technology companies across the globe. If your company’s proprietary technology was recently stolen, you should exercise the powerful remedies made available under various US laws. A prolific business law attorney can help identify the best legal options, including any cross-border remedies, and provide you with strong representation to protect your interests.

What Qualifies as a Trade Secret?

The law describes trade secrets as any information that is valuable to a business as well as of potential value to competitors. You can claim any non-public information that gives you an economic benefit or a competitive advantage as a trade secret. For business information to qualify as a trade secret, it should be:

• Known to a limited set of people.
• Of commercial value.
• Held as a secret by the rightful holder by employing a confidentiality agreement and other similar steps.

Any unauthorized acquisition, disclosure, or use of such secret information in a way contradictory to commercial practices is regarded as a violation of trade secret protection and unfair practice. Trade secrets and other proprietary technology are usually the most valuable assets of a software or technology organization.

These can be in the form of manufacturing techniques, chemical compositions, equipment designs, research methods, product formulas, unique combinations, supplier and vendor details, and customer lists. Companies usually find it necessary to protect this information for maintaining a competitive edge.

Challenges of Trade Secret Litigation

Safeguarding trade secrets has its unique set of challenges and difficulties. This can be seen in the high number of infringement lawsuits, but only a handful of legal settlements. In fact, many cases were awarded insufficient compensation that failed to cover the damages caused by violators.

These are a few complexities associated with legally protecting proprietary technology:

Defining proprietary technology

The primary problem in defending or appealing against infringement claims is identifying the trade secrets. The scope of ownership is usually unclear as it is a combination of existing technologies and public information.

Investigating claims

Handling cases involving proprietary technology and trade secrets requires a thorough understanding of the technological aspects of the asset and identifying all legal regulations that may apply to it. This requires working with a competent and skilled trade secrets attorney.

Proving an infringement

Trade secret infringement requires evidence in the form of proof of legitimate ownership. You would also need to prove the manner in which the infringement occurred, and the damages caused. This can require tremendous effort to gather and produce before a court. Generally, only indirect evidence is available in the form of a new launch by a direct competitor involving proprietary tech.

Gathering evidence

You need to submit relevant evidence for a proprietary technology infringement lawsuit. Failure to submit may result in legal consequences for everyone involved.

Choosing viable and competent courts

You would need to file the infringement suit with a competent court that understands the diversified nature of trade secrets and tech-related infringement claims. This will help you ensure favorable treatment and the protection of your rights.

Trade secret owners need to remain proactive and informed about defending their rights since these factors can make litigation a challenging and painstaking task. You should retain the services of a qualified business law attorney to take the right measures for protecting your trade secrets.

Stolen Trade Secrets: What Now?

Intentional theft of proprietary technology constitutes a crime under both state and federal laws. The Economic Espionage Act of 1996 (EEA) is the most significant law dealing with this. The U.S. Attorney General possesses sweeping powers under the EEA to prosecute any company or person involved in the misappropriation of trade secrets. Intentional copying, selling, or receiving illegally acquired trade secrets is a punishable offense with severe penalties.

Under the EEA, corporations can be fined up to $5 million while individuals can be fined up to $500,000. Violators can be sent to prison for 10 years or less and any proceeds or profits derived seized. The EEA has a widespread reach. It doesn’t just apply to thefts occurring within the United States, but also in other countries. However, this is applicable only if the offense involves the US or the thief is an American corporation or citizen.

Any theft performed on behalf of a foreign agent or government will attract up to $10 million in corporate fines and a jail time of 15 years. Several states have enacted local laws criminalizing trade secret infringement. For instance, Alabama’s version of the Uniform Trade Secrets Act is Ala. Code. § § 8-27-1 et seq.

Choose a Skilled Trade Secrets Infringement Attorney to Protect Your Rights

The BHM Law Group is a full-service business law firm offering a broad practice involving intellectual property, copyrights, trademarks, patents, trade secrets, and related matters. Our attorneys have helped many clients develop and execute legal strategies around proprietary technology centered on the idea of treating them as a business asset. We will work closely with you to not just protect your trade secrets and intellectual assets but also monetize their value.

To set up your complimentary consultation with us, call (205) 964-9764 or reach us online.