With the development of exponentially innovative technology, advanced methods of accessing information, and an increasingly aggressive business environment, having a competitor accuse your business of trade-secret misappropriation is a serious allegation. Trade-secret litigation can be costly and complex for all parties involved. Whether consisting of a secret recipe, chemical process, or even a list of key clients, trade secrets are prized assets to a business. The key to overcoming an accusation of trade-secret misappropriation is properly defending your company's use of the alleged secret information. This article will briefly review the key defenses to an accusation of trade-secret misappropriation.
What Is a Trade Secret?
While trade-secret misappropriation is generally a state-law matter, see, e.g., Core
Labs. LP v. Spectrum Tracer Servs., L.L.C., 532 F. App'x 904, 908 (Fed. Cir. 2013), the area of law has become more uniform with the state-by-state adoption of the Uniform Trade Secrets Act (UTSA). As of January 2014, 47 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have adopted the UTSA. See Uniform Law Comm'n, Legislative Fact Sheet—Trade Secrets Act (last visited Jan. 22, 2014). Only Massachusetts, New York, North Carolina have not yet adopted the UTSA. Id. There is a bill pending in the Massachusetts legislature, however, that seeks, in part, to adopt the UTSA. See Bill H. 27: An Act Making Uniform the Law Regarding Trade Secrets, 118th General Court of the Commonwealth of Massachusetts (last visited Jan. 22, 2014).