California follows the Uniform Trade Secrets Act (“Act”). The Act defines a “trade secret” as anything that derives independent economic value which is not already known to the public and not readily ascertainable by proper means. Trade secret information is something through the use of which others can obtain economic benefit or value. There must be reasonable measures in place to maintain the secrecy of the trade secret in order for it to qualify for trade secret protection.
In many situations it can be challenging to allege and prove the existence of a valid trade secret. A common means of ensuring the secrecy of the information is having the information only disclosed on a need to know basis, providing for restricted access, and having all persons provided with the secret information sign non-disclosure agreements among other factors. No one set of factors determines whether there is a trade secret, rather a finding of a trade secret requires a reasoned analysis of the unique circumstances of each case.
Assuming a trade secret exists, the law allows an aggrieved trade secret owner powerful remedies such as obtaining a court order to stop others from improperly using the trade secret, compelling the return of any trade secret materials, and allowing the recovery of certain types of damages. Courts are generally hesitant to issue orders which control the actual conduct of people and equally hesitant to issue an order that could effectively prevent a former employee or officer from engaging in gainful new employment. However, courts will protect legitimate holders of trade secret from misappropriation of their proprietary information.
If you or your company finds itself in a position of having to bring or defend against a misappropriation of trade secret claim, please feel free to contact our office to see how we may be of assistance.