by Greg Bennett
Your long time employee starts his own company and immediately starts stealing your customers. If this happens, you may be the victim of trade secret misappropriation. In this series of articles, I will explain, using as little “legalese” as possible, what a trade secret is, what can be done to protect your trade secrets and what can be done after a former employee has stolen your trade secrets.
Under the Uniform Trade Secret Act (the “UTSA”), “trade secret” means virtually any information that:
- 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; and
- Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (Civil Code §3426.1).
To satisfy the first prong of this test, information must derive economic value from the fact that is it a secret. If information is to qualify as a trade secret, it must not be generally known in the industry, by the public or by others who can derive an economic benefit from its use. So, for example, if the information could be easily discovered on the Internet, it would be considered “easily ascertainable” and not qualify as a trade secret.