Like beauty, victory can be in the eye of the beholder. A plaintiff who establishes all of the necessary elements of a theft of trade secrets will typically be entitled to an injunction prohibiting the defendant from using the trade secrets. However, this is not guaranteed. If the court determines that “exceptional circumstances” exist, the court may permit the defendant to continue use of the misappropriated trade secrets provided that the defendant pays a reasonable royalty to the plaintiff. When this occurs, the plaintiff may view the court’s judgment as an imperfect victory because the plaintiff has not regained its prior monopoly on use of the trade secrets.
Texas Trade Secrets
Author: Patrick Keating (Page 8 of 10)
My last post discussed how innovations in technology are creating more ways for employees to steal trade secrets from their employers. A high profile case filed this month involving competing ride services Lyft, Inc. and Uber is a poster-child.
Retail department stores place security sensors at each exit that stop thieves from shoplifting valuable merchandise.
Businesses implement security procedures designed to prevent the theft of their trade secrets. The problem is that trade secrets are ideas. Ideas can be stolen in more ways than physically carrying paper out of the exit.
Here is a nightmare scenario for many businesses. A person with access to a business’ trade secrets posts them on the internet. The posting could be by mistake or – worse – out of spite (revenge for being passed over for a promotion or firing). After stating the expletive of choice, what is the business to do?
One aspect of trade secret law that sometimes surprises business competitors is that there is not always a bright line standard as to what constitutes trade secret misappropriation. For example, may I hire a plane to fly over my competitor’s factory in public air space and take pictures to discover the factory design? If a licensee of my competitor is selling my competitor’s product documentation on Ebay, may I conceal my identity and purchase the documentation? May I pay my competitor’s garbage hauler to allow me to rifle through my competitor’s trash to find customer lists or product design information? The answer is not always clear at first glance. Courts that have considered these issues have engaged in analysis of the specific facts of the cases before them, concepts of commercial morality and the reasonableness of the trade secret owner’s precautions against disclosure.
Patrick Keating
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