What Can I Do If a Competitor Has Misappropriated My Company’s Confidential Information?

Businesses and corporations invest significant sums to develop processes, procedures, and an array of practices to stay a step ahead of competitors. By investing in how the business functions and operates, companies attempt to secure a competitive advantage that can open new markets, allow for greater efficiency, or protect intellectual property of a company. However, trade secrets can also include information. For instance, company pricing data at the retail or wholesale level or customer or vendor lists are all generally considered to be trade secrets. The theft or disclosure of this information can result in immense damage to the company’s bottom-line. Even the leaking of upcoming promotional information can allow competitors to adjust their marketing strategies and undercut or counter the business’ offers.

If your company has been impacted by the theft or improper disclosure of trade secrets, the Law Firm of William S. Heyman can help. Mr. Heyman is a commercial litigator with more than 20 years of experience. He founded the Law Firm of William S. Heyman to provide the higher level of one-on-one client service that is so often necessary as a business attempts to navigate the consequences of stolen trade secrets and other confidential information.

What Constitutes a Trade Secret?

Potential clients often want to know whether the information that was stolen or otherwise misappropriated from their business constitutes a trade secret. Whether information constitutes a trade secret is a fact-specific question of law that can only be answered after a careful and exacting inquiry into the details and specifics of the matter. However, to be considered a trade secret in Maryland information must meet three requirements. First, the information must be secret, meaning that it has not been disclosed. Second, the information must have value that is derived from the information being undisclosed and not widely known. Finally, the owner must make use of reasonable measures to protect the secrecy of the information. Maryland courts have found the following types of information to potentially constitute a trade secret:

• Customer lists
• Computer source code
• A specific business process
• Manufacturing processes
• Underlying technologies that make a process or technology possible
• Formulas
• Patterns
• Compilations

However, information previously disclosed or is outdated does not constitute a trade secret. Furthermore, generalized lists of product suppliers or distributors are not held to be trade secrets.

Trade Secret Misappropriate Remedies Under Federal Law

Under federal law the main means of addressing trade secrets is found in the Economic Espionage Act of 1996. The law criminalizes the act of acquiring trade secrets or purchasing the same from an individual who misappropriated the protected information. A potential prison sentence of 15 years and a fine of up to $5 million is possible for individuals or corporations, respectively, convicted under the law. The federal statute also contains a right for a damaged party to bring a private lawsuit to establish an injunction prohibiting the use of the information by the misappropriating party.

Trade Secret Disclosure Remedies Available Under State Law

Maryland’s and most other states’ laws in regard to trade secrets are substantially similar to that of the Uniform Trade Secrets Act. Maryland’s Uniform Trade Secrets Act, or MUTSA, preempts the common law and any other state laws providing relief for the misappropriation of trade secrets. Under the law an injunction enjoining the use of trade secrets can be issued on the basis of a moving party’s:

• Likelihood of success on the merits of the case.
• Whether the plaintiff is likely to suffer irreversible harm if the injunction is not granted.
• The balance of harm occurring to the defendant if the injunction is issued or not issued.
• Public policy reasons including the public interest.

Generally to support a claim of trade secret misappropriation the party suffering damages must prove that a trade secret existed. The plaintiff must also show that misappropriation of the trade secret occurred through the acquisition of the trade secret or the trade secret’s unauthorized use or disclosure.

Under MUTSA, an array of individuals and entities can be held liable for misappropriation of trade secrets.  Nearly any commercial entity including corporations, partnerships, associations, or joint ventures can face penalties. Likewise an estate or trust can also be held liable for trade secret misappropriation. Remedies that can be imposed on the above include:

• Reasonable royalties
• Monetary damages
• Punitive damages
• Attorney’s fees

Trade Secret Lawyer can fight for Your Business

If a competitor or former employee have misappropriated trade secrets to gain an unfair advantage, the Law Firm of William S. Heyman can help. Mr. Heyman is an experienced commercial litigation attorney with 20 years of experience handling corporate disputes and business torts. To schedule a confidential consultation call (410) 305-9287 or contact us online.