Trade-SecretsTrade secret litigation is often times a difficult and intense area of business litigation for our Charleston business litigation lawyers.  The most common matters that our business lawyer provide counsel are in regards to the enforcement of non-competition agreements, non-solicitation agreements and confidentiality agreement.  We both challenge and defend such agreements by way of a lawsuit and/or negotiation. Trade secret litigation is often times a contentious and intense area of business litigation. The business or employer (who is typically the victim of trade secret theft) usually feels angry and betrayed, so there is a certain degree of heightened hostility. Conversely, those accused of trade secret theft, generally former employees, independent contractors, or business consultants, feel unfairly accused or prosecuted and may be worried about their livelihood and the ability to earn a living.

Definition of Trade Secret

The definition of trade secret is stated below.  The language is derived from comment b of section 757 of the Restatement of Torts:

A trade secret may consist of any formula, pattern, device, or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.  It may be a formula for chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers…

One significant limitation on the definition of a trade secret is that it must relate to the continuing operation of a business.  The following factors are customarily considered in determining the existence of a trade secret:

  • The extent to which the information is known by employes and other involved in the business;
  • The extent to which the information is known outside the business;
  • The extent of measures taken by the employer to guard the secrecy of the information;
  • The value of the information to the employer and to his or her competitors;
  • The amount and effort or finances expended by the employer in developing the information; and
  • The ease or difficulty with which the information could be properly acquired or duplicated by others.

After successfully establishing the existence of a trade secret, the injured party, generally the business or employer, must prove that the person accused of stealing the trade secret acquired the trade secret as a result of a confidential relationship.

Trade secrets litigation is an intense area of trademark infringement, commercial litigation, and other business litigation areas. The most common issues Frame Legal handles involve the enforcement of noncompete agreements, non-solicitation agreements, and confidentiality agreements.

Misappropriation of Trade Secrets

Generally speaking, misappropriation theories are alleged along with interference of contractual relations, interference with economic relations, breach of contract, breach of fiduciary duty, trademark infringement, and often unfair competition or unfair business practices.

The business tort of misappropriation of trade secrets can be proven by demonstrating:

  • The injured or damaged business or employer possessed the trade secret; and
  • The person accused of trade secret theft is using the businesses trade secret in breach of an agreement, confidence, or duty, as a result of discovery of business misconduct.

Business Litigation involving claims for breach of contractual agreements, restrictive covenants or non-compete agreements, limiting the use of certain confidential business information are frequently combined with trade secret claims. Additionally, a civil litigation lawsuit for misappropriation of trade secrets may be associated with a criminal prosecution under many federal and South Carolina statutes. As the importance and prevalence of business and corporate espionage has increased and threatened various business industries, the use of criminal prosecution has also increased.

If you or your business need assistance with a trade secret lawsuit or related litigation, contact our Charleston litigation attorneys.  Please feel free to email or call our Charleston law office to inquire about your case.