Sue Agains Someone Who Stole Trade Secret

Employees inevitably gain access to valuable trade secrets during their time working for a company. Merely what happens when they move on? One-time employees can pose a serious threat by joining a competitor and sharing valuable trade secrets with their new employer. This article explores some of the legal avenues available to employers in the event their merchandise secrets are stolen.

Have Stolen Trade Secrets?

Our intellectual holding attorneys tin can help your company recover its trade secrets and seek legal action against the private who misappropriated them. Call 303-688-0944 to schedule a gratis case assessment to appraise your litigation options.

How to Fight Misappropriated Merchandise Secrets

When a one-time employee steals your trade secrets, it is known every bit misappropriation. And when it happens, your priority should be preventing further unauthorized use or disclosure of this information. Our trade underground attorneys have a number of legal tools at their disposal to right the wrongs committed by an ex-employee who is trying to illegally benefit from misappropriating your trade secrets.

Send a Stop-and-Desist Letter

Depending on the circumstances of your case, your attorney may recommend sending a cease-and-desist letter to the former employee.

These letters typically remind former employees of their contractual obligations to the employer and advise them to cease all comport that violates those responsibilities. If appropriate, a cease-and-desist letter of the alphabet can also need the return of data, documents, or information.

Need letters can be a more affordable alternative to filing a lawsuit or a precursor to one.

It iscrucialthat you can substantiate allegations of trade secret misappropriationbefore sending a end-and-desist letter. If not, yous could be vulnerable to a tortious interference claim past your quondam employee or their new employer.

File a Lawsuit

While cease-and-desist letters are very constructive at getting someone to comply with your demands, you may take to resort to a lawsuit. Filing a lawsuit can aid you lot recover your stolen trade secrets and even obtain damages.

Which Court to File Your Lawsuit

Until recently, employers seeking redress for stolen trade secrets could rely just on state courts. Most states, including Colorado, take adopted some version of the UTSA. However, these laws all the same tend to differ across state lines — both in text and application.

The Defend Merchandise Secrets Act, which was passed in 2016, allows an owner of a misappropriated trade secret to sue in federal court. Importantly, the DTSA only applies if the trade underground is related to a product that is used in or intended for employ in interstate or foreign commerce.

The DTSA merits can be combined with whatsoever applicative state law claims under statutes or common law, including for:

• misappropriation of trade secrets
• breach of a confidentiality or not-competition understanding
• unfair contest

Under both the DTSA and the Colorado Uniform Trade Secrets Act, yous must bring activity no later than three years after the date that the misappropriation either was discovered or should have been discovered with reasonable diligence.

The DTSA provides yous with a new federal cause of activity. Information technology does not preempt existing state trade underground laws. State laws may provide slightly different relief than the DTSA. You might desire to consider bringing concurrent state and federal merchandise secret claims.

Seek Injunctive Relief

In most cases, employers volition inquire the court to issue an injunction. An injunction orders someone to stop (or in some cases start) doing something.

In your case, an injunction could be useful in preserving evidence and preventing time to come disclosure of your merchandise secrets.

However, injunctions may not forbid a person from getting a job. Additionally, any weather condition placed on the employment relationship must be based on evidence of threatened misappropriation — not only on the information the person knows.

The Colorado statute on injunctive relief states that:

Temporary and terminal injunctions including affirmative acts may be granted on such equitable terms as the court deems reasonable to foreclose or restrain actual or threatened misappropriation of a trade secret.

Federal Courtroom Injunctions

When filing an injunction in federal court, employers must show four elements.

Beginning, you must demonstrate that the lawsuit is likely to succeed on merit.

Adjacent — and arguably nearly important — you must demonstrate that your business is probable to suffer irreparable harm that cannot exist compensated with budgetary damages later the fact.

This damage must also outweigh whatever potential harm the employee might suffer under the injunction.

Finally, the injunction cannot be against the public involvement.

Request Budgetary Damages

In add-on to injunctive relief, several types of amercement are typically available for merchandise clandestine misappropriation.

Royalties

Sometimes damages in merchandise undercover misappropriation cases can depend on future events or sales. This makes it difficult to quantify the harm suffered past the employer.

In these cases, the amercement caused past stolen merchandise secrets may be measured by the imposition of liability for a reasonable royalty for the employee'southward unauthorized disclosure or use of a trade secret.

Compensatory Amercement

Y'all can generally request compensatory damages that result from the misappropriation of merchandise secrets.

Under Section 3 of the Uniform Merchandise Secrets Human action, amercement tin include both the actual loss caused by misappropriation and the unjust enrichment caused past misappropriation that is not included when calculating your actual loss.

Under Colorado police force, unjust enrichment means the employee benefitted at the plaintiff's expense under unjust circumstances.

Exemplary Damages

In the event of willful and malicious misappropriation, the court may award exemplary damages.

Nearly all state laws, including Colorado, follow the UTSA and permit exemplary damages limited to twice the underlying award.

Attorneys' Fees

Litigation is an expensive endeavour. Chaser fees tin can oft be a barrier to filing a lawsuit. Notwithstanding, in improver to amercement, you can sometimes recover your attorneys' fees if the trade hugger-mugger misappropriation is willful and malicious .

Championship 7, Article 74 of the Colorado Uniform Trade Secrets Act reads:

If a merits of misappropriation is fabricated in bad faith, a motion to end an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may award reasonable chaser fees to the prevailing party.

Seizure of Property

Different the UTSA, the DTSA also permits the court to issue an ex parte seizure order. This allows courts to take property without the owner's consent. Ex parte seizure orders are designed to preemptively prevent harm while litigation is ongoing.

The DTSA includes protections designed to prevent abuse of this powerful remedy. Ex parte seizure orders are allowed just nether extraordinary circumstances.

Were Your Trade Secrets Misappropriated?

While at that place is some consistency on how trade cloak-and-dagger misappropriation cases are handled, the courtroom'due south decision volition largely depend on the facts specific to your instance.

A trade secret chaser can aid you lot recover your company's trade secrets and recoup maximum damages. Telephone call 303-688-0944 for a free instance assessment today.

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Source: https://www.robinsonandhenry.com/colorado/intellectual-property/when-an-employee-steals-your-trade-secrets/

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