Trade Secrets in Unfair Competition Cases

Trade secrets provide a competitive edge for a company, and when someone steals, sells or misappropriates these items, it could ruin the company affected leading to failure in the market. If these actions occur, the company owner may need to seek reparations or compensation through the courts to mitigate the damage or remedy the disaster.

Through a secret in processes, ingredients, methods, parts or various other procedures, trade secrets remain confidential information and protect the company through intellectual property rights. Misappropriation cases arise when someone or a company either steals, copies, sells or discloses the information that provides the competitive edge that is a trade secret. The matter becomes more complicated when the details across the United States country borders, but many of these issues arise when an employee or competitor becomes involved. This could end in unfair competition where the affected business needs to take the perpetrator to court for a remedy.

Unfair Competition in Misappropriation

Unfair practices in competition occur when one company causes the economic damage of another through the actions the entity engaged in. When combining these situations with misappropriation, the perpetrator may steal or buy the trade secret to ruin the competitive edge of the company with the trade secret. By doing so, it is possible to remove the product or service sales and decrease or eliminate revenue through the secret. Additionally, the other company may sell similar or the same items once one entity no longer holds the secret solely. Then, it is important to seek the services of an experienced lawyer.

What Is a Trade Secret?

The details of how a company is able to create a product or service may exist in a trade secret. These are usually through ingredients, processes or information about the products or services. For those that create edible items, the trade secret most often exists in the recipe. Manufacturers may have a process or method used that provide the competitive edge. Some may have a calculation for services or a computer code that forces the machines to run faster. Proprietary software may constitute a trade secret, and only the company that creates such programs may use the software unless sold through a license.

How Trade Secrets Provide a Competitive Edge

For a trade secret to possess protections through legal channels, the secret itself must provide a competitive edge in the business world for a local or specific market. The company may not have any option to pursue legal recourse for misappropriation if the competitive edge does not already exist. However, the application of the information from the secret applied to the business world will give the company an edge in sales or services. A company that creates coffee may have a new process that infuses more flavor into the beverage, and consumers flock to the store to purchase more of it. This is a competitive edge in the market, and it generally increases revenue significantly.

The Case of Misappropriation

When the company affected needs a remedy to the trade secret misappropriation, it is important to pursue the claim with a lawyer. A legal representative on retainer is usually part of the proceedings, but someone with a background in intellectual property may become involved for a better chance at success. The plaintiff will need to prove that the other company or person did steal, copy, sell or disclose the trade secret details with another party of the public. The burden of proof is on the plaintiff, but disclosure is not difficult to prove when the consumer public is aware of the information. Then, it is just a matter of showing the fault with the defending party.

A legal solution is possible throughout the United States due to the new definition of what a trade secret is. A judge will have clear access to understand what these cases will mean and how to proceed. However, if there is a possible solution that does not require litigation, the hired lawyer may attempt to negotiate the remedy. Keeping the company out of the spotlight that a lawsuit may provide is important, and it may ensure the continued secret kept.