Competition tends to bring out the worst in people, and this is never truer than in the cut-throat world of business. One of the most disruptive events that can happen to a company, at any time but most critically in the early stages of the business, is the charges of trade secret misappropriation in California. These charges can be difficult to defend against and expensive risking the ruin of a company before it’s had a chance to become established.
Fighting Trade Secret Charges
There are several steps that your clients can take to defend against charges of trade secret misappropriation in California:
- Thinking Ahead: If your clients are currently employed by a company and are planning to leave, possibly with co-workers, to form their own enterprise, defense against trade secret misappropriation charges begins immediately. Advise your clients to be scrupulous about never taking materials home from work. Emailed attachments are easily tracked and downloading information to thumb drives is equally detectible.
- Have new employee certify that they have not retained any documents inappropriately and that they have no legal encumbrances that might affect their employment. A check list prepared in advance might be an effective tool to accomplish this pre-employment interview. The more comprehensive this list is, the better-protected the business will be even if an employee is later found to have been deceptive.
- Prepare origination documents such as an Invention Assignment Agreement to be as broad and inclusive as possible in order to ‘lock out’ spurious interpretations that might allow a competing claim some room to breathe.
Advise your clients that these steps to safeguard their business from charges of trade secret misappropriation in California are simple and affordable, whereas fighting litigation against filed charges can be incredibly expensive, even ruinous to a business. A little forethought and planning will make all the difference.
Disputes often arise from a handshake that in the mind of each of the parties represents something quite different. This happens often in the development of intellectual property because engineers, developers and other creative people are focused on the technology and too often ignore the business. The results are disputes over ownership in and contractual obligations related to the intellectual property rights. Such intellectual property agreement disputes often involve large and multinational corporations but even more frequently involve small independent businesses. Such disputes, if not resolved quickly can result in the downfall of the business, creation of personal animosities, losses to investors and substantial damages claims and litigation.
In cases where public and privately owned companies are in possession of highly sophisticated intellectual property portfolios, damages from such disputes can be in the hundreds of thousands or even millions of dollars.
Of course, the first effort should be to put all agreements into writings which detail the obligations and rights of each of the parties. However, immunity form disagreements and disputes is not even assured when the agreement is in writing as disputes over the meaning and interpretation of the written agreement can still occur. Where parties cannot come to a mutual resolution of a dispute, the result is often intellectual property agreement enforcement and litigation in CA or elsewhere.
Categories Concerning Disputes over Intellectual Property
Intellectual property agreement enforcement and litigation arises from disputes in four broad categories:
- Trademark litigation: This is likely the most common type of dispute and involves the defence and/or prosecution of any claims relating to trademarks, service marks, logos, domain names, publicity rights and the like. In short, disputes over the identifiers a business uses to let consumers know who they are who makes the products or gives the services. Business want to protect the integrity and good will of their business by preventing other from confusing the public as to the source and origin of the goods and services bearing those identifiers.
- Copyright litigation: This includes disputes over creative works by an author. Intellectual Property disputes in this category often relate to the unauthorized or unlicensed use of the work, the failure to give proper attribution or the use of the work beyond what is licensed.
- Patent litigation: This includes disputes over use of technology over which an inventor has exclusive rights. Often disputes involving patents arise from the unlicensed use of rights covered by patents and result in challenges to the validity of the patent, the interpretation of the patent or meaning of license agreements.
- Trade secrets litigation: This includes disputes arising from theft of trade secrets by an employee form an employer, industrial espionage, computer hacking or the disclosure or use in violation of non-disclosure, development or consulting agreements.
Citing Precedent When Enforcing Intellectual Property Agreements
Pursuing intellectual property agreement enforcement and litigation is a lengthy process and each case will be comprised of individual elements. However, some answers at least can be found in past rulings made by the Courts.
As an attorney representing either the plaintiff or defendant in a matter involving an intellectual property dispute, it is important to investigate the nature of similar intellectual property disputes and become familiar with statutes, regulations and legal precedents that may apply in order to effectively represent your client.
When a company has what it considers to be a trade secret, the fear of misappropriation becomes paramount. While there are various legal means for competitors to deduce or discover a trade secret, including hiring away employees with knowledge of the secret and certain reverse-engineering tactics, even legal means can be considered “misappropriation.” As a result, many companies mistakenly focus their resources on prosecution of misappropriation when they should, instead, focus equally on prevention of misappropriation.
Prevention is Crucial
An intellectual property attorney in California will advise their clients with trade secrets to have clear, fully documented procedures for the protection of their trade secrets because the courts require it for trade secret status. In other words, the courts only consider something to be a qualifying trade secret if steps are taken to protect it. A “secret” that is widely shared with no system in place for protection isn’t much of a secret, after all, and you cannot simply declare something a secret verbally and assume the full protection of the law.
Steps for Protecting Trade Secrets
An experienced intellectual property attorney in California can assist with creating a viable protection scheme for trade secrets, which should, at minimum, consist of the following components:
- Contractual language that offers explicit protection via confidentiality agreements, non-solicitation provisions, and/or intellectual property assignments.
- Data protection on servers and all network-reachable devices and files, including privilege management on users, strong password policies, and firewalls.
- Employee education should be mandatory, with employees acknowledging that they have been trained in how to protect confidential information.