Trade Secrets: Trade Secret Theft

Texas law defines a trade secret as “any formula, pattern, device or compilation of information which is used in one’s business and presents an opportunity to obtain an advantage over competitors who do not know or use it.” Often, a company must share its trade secrets with employees, current and prospective. Trade secret theft may give rise to damages for misappropriation of trade secrets.

Getting Damages in a Trade Secret Theft Case

A plaintiff in Texas must prove the following:

(a) the existence of a trade secret; (b) the defendant acquired the trade secret through improper means, in breach of an express or implied duty of confidence, or with knowledge that the trade secret was improperly obtained, impermissibly disclosed or inadvertently revealed; (c) the defendant used or disclosed the information; and (d) the use or disclosure of the trade secret information resulted in damage to the plaintiff or benefit to the defendant.

Measuring Damages in A Trade Secret Theft Case

Taking these elements into account, a significant aspect of trade secret theft case is that disclosure alone, even without use, may impose liability. Damages for trade secret theft claims are generally measured in one of three ways: (a) the value of the trade secret to the owner (often the plaintiff’s lost profits); (b) the value of the trade secret to the defendant (often either the defendant’s profit from use of the misappropriated secret or the development costs saved by the defendant as a result of using the trade secret); or (c) a reasonable royalty.

About the trademark law firm:

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the IP law firm and its IP law attorneys may be found at www.klemchuk.com.

 Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.