Practice Areas

Trade Secret

Trade secrets protect internal procedures, proprietary compositions, customer information, and the like, if it is protected from disclosure to others, is not generally known to those in the trade or industry, and if it provides an economic advantage to the owner. State law has traditionally provided trade secret protection, such as under the Uniform Trade Secrets Act that is adopted in most all of the states. Illinois, for instance, has adopted that Act with this definition:

(d) “Trade secret” means information, including but not limited to, technical or non‑technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that:

(1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and

(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.

765 ILCS 1065(d). Precautions must be taken when litigating a trade secrets claim that the plaintiff’s trade secret is not disclosed in public papers or in open court; protective orders are entered for this purpose on motion by the courts. Also, back-designations, where the plaintiff adapts its “secrets” to exactly what the defendant is making or doing, are avoided by having the plaintiff file under seal with the Court, prior to discovery starting, its statement of the allegedly stolen secrets; that statement is opened and disclosed to defendant’s counsel only after discovery of the defendant’s processes, compositions, etc. is completed. If there is no correspondence, the case is over.

More recently the federal government has adopted a theft of trade secrets act:

(a) Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will injure any owner of that trade secret, knowingly—

(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;

(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information; [or]

(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;

18 USC 1832. Parts (4)-(5) make criminal any attempt and any conspiracy to steal a trade secret. Part (b) provides stiff penalties to takers and receivers of trade secrets protected under federal law. The federal statute does not define “trade secret” but takes its force from state and common law definitions. 18 USC 1836 allows the Attorney General to bring a civil action to protect or enforce a trade secret of a company by injunction; in practice, getting local federal authorities to act can be difficult.

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