What is the legal idea behind misappropriation of trade secrets and how can this valuable legal protection help your San Diego or Southern California business? There are occasions where a covenant not to compete may be partially or fully enforceable, such as in a medical or healthcare law environment. However, most business owners and executives know California has made it illegal for employers to implement or support covenants not to compete in the manner one would expect or hope for, or might actually have in place in other states. While California has made non-compete agreements illegal, outright, the misappropriation of trade secrets can be a very effective tool for protecting your company from the taking of proprietary property and knowledge by business partners, vendors and customers, as well as current and former employees and future competition.
Key Takeaways About the Legal Idea Behind Misappropriation of Trade Secrets:
- Non-compete clauses, contracts, or agreements are illegal in the State of California.
- Trade secret policies provide a strong, enforceable strategy to prevent those closest to your business from taking the essence of your company, and using that knowledge against you.
- Civil remedies for misappropriation of trade secrets include immediate injunction, financial damages, “reasonable royalties,” and the potential for substantial punitive damages if the misappropriation was malicious in nature, or a willful act against a known agreement or policy.
Trade Secret Agreements
The Watkins Firm works with our business clients to implement trade secret agreements that can and will protect your vital interests and reduce or eliminate the opportunity for an employee to take what they’ve learned from you and compete against you in the local marketplace.
The misappropriation of trade secrets and intellectual property are absolutely enforceable under California law. This is the legal idea behind the misappropriation of trade secrets. They protect your business, your secrets, and are legally enforceable in the State of California.
What Can the Protection of Trade Secrets Extend To?
What can the protection of trade secrets extend to and how should you consider applying the legal idea behind misappropriation of trade secrets to your company?
Did you know that trade secrets and proprietary information could apply to most of the issues that concern any business owner, such as:
- Pricing
- Information and contacts relating to suppliers, and supply chain strategies
- Presentations, marketing strategy and tactics and social media practices and campaigns
- Technical knowledge or industry specific skills or expertise
- Supplier and Customer lists and contacts
- Corporate correspondence including emails, texts, and documents
- Processes and best practices
The Watkins Firm will help to protect your business by crafting policies and procedures that clearly establish “trade secrets” and “proprietary information.” We protect as much as possible the business knowledge and assets of your company, as well as the manner in which you conduct business. Our trade secret agreements protect your strategies, market expertise, suppliers and customers and the investment you’ve made to teach your employers the unique aspects of your own business.
Pro-Tip: “Theft and embezzlement unfortunately happen a lot. This definitely extends to trade secrets. So, what might an unfair business practice include? In reality, a better question is what would not be considered as an unfair business practice? Because it seems to be in every lawsuit that we defend, you sue someone for sexual harassment, you’re going to get sued for unfair business practices. You sue them for any type of fraud in the business arena, you’re going to sue for unfair business practices. You sue them for unfair competition, misappropriation of trade secrets… There you go.
You’re going to get sued under Business and professions code section seventeen thousand two hundred and seventeen thousand five hundred. And there in between, there are many, many laws talking about what’s unfair and what you can sue for. And it seems to cover everything. It seems to be included in almost all lawsuits, and it has an attorney’s fees clause.
What are some of the basic examples of unfair business practice? It actually helps to look at it from two perspectives. If you are being sued by like someone you’re dealing directly with and they say, ‘well, what you’re doing is gaining an unfair business advantage over me, you’re violating my rights.’ That’s a direct unfair business practice. If the person across the street is in business and it’s similar to yours and they’re doing things that are affecting your business to their advantage and your detriment, that could be an unfair business practice. So as broad as it is, and as big, and as many large examples as it has, it’s important to see your lawyer at the Watkins Firm.
When you’re in business and you have contracts, this is a big way people get in trouble. They put things in their contracts that are deemed to be an unfair business practice. And those can be anything from how they price, how they pay their employees, how they advertise, how they labeled their products. All those things can turn into unfair business practices and a cause of action. And you’re getting sued.
I would think one of the biggest buckets would be fraud and unethical contact. It’s pretty widespread. I mean, those are strong words for describing it. I don’t think you have to use unethical, or those are words we use for an actual fraud cause of action in unfair business practices. It’s more of a, ‘what was the effect of your action? Were you accurate in your representations? Did someone detrimentally rely on something you did say or said to their detriment? And were there any other statutory violations that you committed in the context of whatever contractor agreement you have that would make it unfair to whoever you’re dealing with or to your competitors?’” – Dan Watkins, Founding Partner
Helping Our Clients to Implement the Legal Idea Behind Misappropriation of Trade Secrets
The Watkins Firm has almost four decades of experience helping our clients to implement and leverage the legal idea behind misappropriation of trade secrets in San Diego and throughout the State of California.
We work with our clients to establish the basis for identifying and protecting your trade secrets. Misappropriation of trade secret convictions require that we prove you own the trade secret in question, that the employee/former employee or business associated “acquired, disclosed, or used” your firm’s trade secret(s) through “improper means” and their actions resulted in damages to your business. The misappropriation of trade secrets is an unfair business practice that generates substantial civil and potentially criminal legal exposure.
The civil law remedy for misappropriation includes injunction [to stop competition from former employee or competitor who acquired your trade secret(s)], a fine of up to $250,000 for an individual or $5 million for a corporation and the potential for imprisonment for up to 15 years in a criminal law matter.
If you are concerned an enforceable legal strategy which effectively protects your company we invite you to review our podcast Episode 10 – The Importance of a Strong Corporate Attorney as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
Meet Daniel Watkins:
Daniel W. Watkins is a true people person who sincerely listens. He cares deeply about what others are going through. Dan enjoys digging into the facts and finding creative solutions to problems. He contributes his insights candidly and constructively.
Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.
Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a trusted litigation strategist and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.
He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.
THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR
Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.
In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.
