Trade Secrets

Trade Secrets are an important component for most companies.  Failing to protect and defend as "confidential" intellectual property information may lead to losing the right to protect such critical information and processes as a "trade secret".  It is therefore critical for businesses to vigilantly protect and safeguard intellectual property assets.  The law of trade secrets has a broad application.  Problems often arise in the employment setting, usually when a departing employee feels they can take a company's "secret sauce," steal clients and start a competing business with impunity.

Trade secrets are a key employer right.  Trade Secrets can be difficult to protect as they are not typically registered like other types of intellectual property such as Patents, Trademarks, and Patents.  However, Trade Secrets are frequently the key asset of a business, and need to be protected vigorously. If a business has "information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use" that "is the subject of efforts that are reasonable under the circumstances to maintain its secrecy," then the employer or business owner has a legally "protectable" trade secret.  If such a Trade Secret exists, an employee has no right to take it (or steal it) from the business and use it for any purpose whatsoever, especially to compete with the former employer.

"Covenants not to compete" are void under California law (Business & Professions Code section 16600). In many other states such covenants are enforcable, but not in California.  While California employers cannot lawfully enforce "covenants not to compete" (with certain limited exceptions), that certainly doesn't mean they can't take legal action to protect their trade secrets.

McFarlin & Geurts attorneys are experienced trail lawyers practicing in all types of business litigation, intellectual property and trade secret matters.

If Trade Secrets are revealed publicly, either inadvertently, or by theft, a business needs to act quickly and consider a variety of actions to minimize further exposure including the filing of a trade secret lawsuit and an injunction.  If a party who is in possession of your businesses trade secret information begins using it unlawfully, they are essentially stealing from your business and action must be taken immediately.  McFarlin & Geurts can help your business organize a strategy for expeditious resolution of claims to maximize recovery and minimize business disruption.

McFarlin & Geurts Trade Secret and Intellectual Property services include:

• Patents
• Trademarks
• Copyrights
• Contracts
• Agreements
• Non-Compete Agreements
• Non-Disclosure Agreements

Often times an employee who is sued in a trade secret lawsuit may have legitimate defenses to raise.  Most commonly, former employees may be sued for misappropriating business practices or procedures which do not rise to the level of a "trade secret".   In these instances, it is important for the former employee to have proper representation, or resolve the matter as quickly as possible to avoid unnecessary costs and fees.   Since litigation frequently serves only to exacerbate such public disclosure situations, all parties are amenable to settlement or mediation.