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California trade secrets law helps stop unfair competition

| May 23, 2019 | Firm News

Businesses have various kinds of trade secrets. The company information you must protect need not be a world-famous recipe like Kentucky Fried Chicken.

The California Uniform Trade Secrets Act offers protection against the misappropriation of vital company information that could result in unfair competition.

Preferred terminology

The California Uniform Trade Secrets Act employs the term “misappropriation” rather than “theft” when describing the improper procurement and use of company information. The term “improper,” according to Civil Code section 3426.1, covers “theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy or espionage through electronic or other means.” Misappropriation refers to prohibiting the use or disclosure of company trade secrets.

Issues for former employees

The UTSA comes into play when, for example, a former employee either physically takes trade secret information from a business or copies it for dissemination outside the company. An employee also runs afoul of the UTSA when using the former company’s trade secrets to solicit business for a new employer. Physical evidence of misappropriation of trade secret information is not required. UTSA protection extends to the memory of a former employee; that is, the former employee can be deemed guilty of misappropriation if using his or her memory to reveal trade secret information.

Types of trade secret information

There are many examples of famous trade secrets; besides the recipe for KFC, the formula for Coca-Cola comes instantly to mind. However, you may be in manufacturing or construction. You may own a bakery or a transportation company with a fleet of limousines. Your trade secret information may well lie in your customer lists, bid specifications or spreadsheets. There are many businesses in California and plenty of competition to go around. You do not need unfair competition to add to the mix. It is important to protect your trade secret information and to know that under the UTSA you have legal options to pursue if that information goes missing.

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