Elisa Frye was excited and optimistic about her new entrepreneurial venture implementing her 10-year-old vision, with the potential to revolutionize the financial software industry and provide much needed assistance in regulatory compliance with current and rapidly changing financial services laws. One can only imagine her surprise when she learned that a former employee took her idea and had already brought it to a competitor for development. The shock and dismay that Elisa experienced paled in comparison with the legal spend she faced in trying to fulfill her dream for this new venture. All of the second-guessing about what could have been done to prevent this would not benefit Elisa; it could only pave the way for others to learn from the resulting appellate decision, which effectively shut her down.
Elisa’s story is a hypothetical one, but there’s no reason to think it will remain that way. The importance of understanding one’s rights to protect and manage a company’s trade secrets cannot be overstated. Trade secret protection is not automatic. Positive action must be taken to limit the ability of others to use confidential and proprietary information. By raising awareness with employees, vendors, and other agents, a company may put itself in a position to obtain court relief, including the possibility of an award of damages and injunctive relief.