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:

1. 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
2. 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.

Wylie Strout has been licensed to practice law in the State of New York since 2000 and in the State of California since 2008.  Ms. Strout has represented both public and private companies in securities offerings, mergers and acquisitions, venture capital financings, and general corporate governance matters.  Ms. Strout is also admitted to practice before the United States Tax Court, United States District Courts in the Central and Southern Districts of California and the New York State Supreme Court, First Appellate Division.  She is a graduate of Fordham University School of Law and the University of Wisconsin-Madison.  Ms. Strout’s areas of practice include Business Transactional Matters.

David S. Lee, Jr. has been licensed to practice law in the State of California since 2006.  Mr. Lee has provided general counsel for Fortune 500 companies and other sophisticated clientele.  Mr. Lee has also handled a number of business litigation matters and assisted in the preparation and representation of the Firm’s clients throughout various Chapter 11 proceedings.  Mr. Lee is also admitted to practice before the United States Tax Court and the United States District Courts in the Central and Southern Districts of California.  Additionally, Mr. Lee serves as a board member and officer of the Riverside County Bar Association Barristers organization, the official County Bar Representatives of all attorneys 37 and younger in the Inland Empire.  He is a graduate of the University of  San Diego School of Law. Mr. Lee’s areas of practice include Business Transactional Matters and Chapter 11 Reorganization.