Trade Secrets Theft Lawyer

What is Trade Secret Theft?

Trade secret theft occurs when confidential and proprietary information of a company is knowingly disclosed or used by someone without authorization for the financial benefit of someone other than the owner(s) of the trade secret.

Engineer Theft of Secrets

An area of concern for many Bay Area, Silicon Valley, and technology companies throughout California is the theft of trade secrets by employees, independent contractors, consultants, or others who have access to highly proprietary information. Where a particular process, technique, method, or practice may not be protectable under patent or copyright law, technology companies rely on trade secret law to safeguard sensitive information from disclosure to competitors and the public.

Employees with access to such proprietary information may commit trade secret theft by utilizing the information they have access to for their personal benefit, or by disclosing that information to others. Such allegations can have significant professional implications, in addition to legal and financial consequences.

Misappropriation of Customer Lists

An analysis of trade secret theft, particularly in the form of customer or client lists, is different in California than other jurisdictions because California law prohibits any restraint on trade in a contract unless an exception under California’s Business and Professions Code applies.

When it comes to the misappropriation of customer or client lists, the proper avenue for relief is through a tort claim rather than a breach of contract claim. Under California law, provisions in an employment contract or independent contractor agreement that prohibit solicitation of clients or customers will not be useful in stopping the disclosure or use of the list. However, if the company can prove that the customer list constituted a trade secret that has been improperly acquired or non-consensually used or disclosed, then the company may seek relief in a tort action.

What are the remedies for companies who suffer theft of trade secrets?

What are the penalties for those found guilty of trade secret theft?

Theft of trade secrets is a federal criminal offense under the Economic Espionage Act, which can result in fines of up to $250,000 and incarceration for up to ten years. It may also be punishable under the Defend Trade Secrets Act (DTSA), which amended the Economic Espionage Act and made it easier for companies to bring a civil claim for damages in federal court. The DTSA prohibits the taking or copying of trade secrets without authorization and the knowing receipt of stolen trade secrets. As a result, additional consequences to trade secret theft include a judgment against the defendant for monetary damages in a civil tort claim.

Potential Defenses to Trade Secret Theft

Whether you have suffered from the theft of your trade secrets or you have been accused of trade secret theft (including in connection with switching employment from one company to a competing company), it is important to know the potential legal defenses that may be relevant to these disputes.

Potential defenses to trade secret theft may include:

• The owner made the information in question public before the accused disclosed the same.
• The accused did not in fact disclose the information in question.
• The information in question was not confidential or proprietary.
• No relevant or enforceable contractual clause or policy prohibited the disclosure of the information in question.

Trade Secret Theft Lawyer in San Francisco and Throughout California

At Delahunty & Edelman LLP, we represent both business owners affected by trade secret theft and those accused of misappropriating trade secrets. With years of experience in trade secret litigation, our attorneys are prepared to resolve these matters efficiently when possible. When negotiation or settlement isn’t in our client’s best interest or litigation becomes necessary, we are fully equipped to pursue an assertive litigation strategy to safeguard our clients’ legal, financial, and professional interests.