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Remedies for Trade Secret Misappropriation

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What Can I Recover If My Trade Secrets Have Been Misappropriated?

Trade secrets are protected against "misappropriation," which includes a breach of a confidentiality agreement or discovery of a trade secret held by another by improper means. There are several remedies available to trade secret owners in the event of misappropriation. These remedies include monetary relief, equitable relief, and costs and attorney's fees.

Monetary Relief

Monetary relief, in the form of compensatory damages is available to remedy trade secret misappropriation:

  • Compensatory damages - An owner of a trade secret may recover losses incurred and/or the misappropriator's profits as a result of misappropriation.
  • Royalties - The court may also opt to award a "reasonable" royalty amount, according to the Uniform Trade Secrets Act.
  • Punitive damages - Punitive damages are available under the Uniform Trade Secrets Act for willful and malicious misappropriation. In some cases, these awards have been in the amount of millions of dollars.

Equitable Relief

Injunctions are orders issued by a court ordering someone to do something or prohibiting some act. Injunctions are available in two forms:

  • Preliminary injunctions - court orders made in the early stages of a lawsuit or petitions which prohibit the parties from doing an act which is in dispute
  • Permanent injunctions - final orders of a court that a person or entity discontinue doing certain activities permanently or take certain actions

Preliminary injunctive relief is generally granted to the prevailing trade secrets owner. Permanent injunctive relief generally has a time limit imposed on it, which follows the "head start theory." The "head start" theory is based on determining how long it would have taken the misappropriating company to discover the trade secret.

Frequently, the trade secret injunction will be tied in with an order requiring the return of materials related to the trade secrets at issue.

Costs and Attorneys' Fees

Costs are typically recoverable and, in areas that have adopted the Uniform Trade Secrets Act, the court may award attorneys' fees if the misappropriating party has been found to have acted in bad faith.

Should I Consult a Lawyer about My Trade Secret Issues?

The remedies and resolutions for trade secrets issues are detailed and complex. An experienced intellectual property attorney can help you choose the remedy that works best for your particular needs. A lawyer can also participate in on-going research to make certain no one else is using your trade secrets without your permission. Additionally, in cases of trade secret misappropriation, an attorney can guide you through the difficult and strict procedural requirements for litigation and bring out the core issues of your case.

Photo of page author Adam Vukovic

, LegalMatch Legal Writer

Last Modified: 05-19-2015 01:42 PM PDT

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