Trade Secrets Disputes

New York Lawyers Knowledgeable in Commercial Litigation

Trade secrets consist of formulas, processes, devices, or compilations that are used in business and that provide a competitive advantage. While most states have adopted the Uniform Trade Secrets Act, New York and some others have not adopted it. In these situations, trade secret disputes are governed by the state's common law. Section 757 of the Restatement of Torts is used by courts to decide whether business information should be protected as a trade secret. The litigation attorneys at Klapper & Fass can advise clients in New York and beyond if they are involved in a dispute over this type of intellectual property.

Protecting Your Interests during a Conflict over Trade Secrets

There are multiple factors that a court may consider when deciding whether information should qualify as a trade secret. These factors include whether the information is known by people outside the business, the extent to which employees and others within the business know the information, what measures are taken to guard the information's secrecy, how valuable the information is to both the business that owns the trade secret and its competitors, how much money or effort was used to develop the information, and how easily others could acquire or duplicate it.

While an inadvertent disclosure does not necessarily terminate trade secret protection, a company is expected to use reasonable methods to keep secret the information it seeks to protect as a trade secret. The determination of secrecy is a factual question. In most cases, businesses protect their trade secrets by using nondisclosure agreements.

When trade secrets are stolen, they are "misappropriated." To hold a defendant liable for misappropriation, you would need to show that you possessed a trade secret and that the defendant used the trade secret in a breach of a confidence, duty, or agreement or because it discovered the trade secret through improper means. Common arguments made by defendants to try to defeat a misappropriation lawsuit are that a plaintiff does not have a legally protectable trade secret, or that the appropriation was not in violation of an agreement, duty, or confidence.

In New York, a company whose trade secrets have been misappropriated can stop further disclosure by seeking an injunction. The company can also potentially seek financial compensation for the loss. This compensation may be measured by the actual losses suffered by the company or the profits of the thief. In certain circumstances, it may be appropriate to request punitive damages.

You have three years from the date of discovering a misappropriation to bring a lawsuit. However, it is wise to bring these lawsuits right away to stop the thief from doing further damage by revealing the trade secret to others.

Depending on the facts in your case, you may also have a claim for unfair competition and breach of contract. In order to prevail on an unfair competition claim, you would need to show that the defendant, acting in bad faith, misappropriated a commercial advantage that belonged exclusively to you. Although New York has not adopted the Uniform Trade Secret Act, some federal laws do apply to trade secrets, such as the Economic Espionage Act of 1996, which prohibits trade secret theft by someone intending to injure the trade secret’s owner.

Consult a New York Attorney to Discuss Your Business Dispute

The outcome of a business dispute can substantially affect a company in New York or elsewhere. An experienced lawyer can help protect your competitive advantages. At Klapper & Fass, we serve businesses in intellectual property litigation from our offices in Manhattan and White Plains. We serve all five boroughs of New York City, as well as Rockland, Orange, Suffolk, Dutchess, Nassau, and Westchester Counties. Our attorneys also are available to businesses in Texas and Connecticut, among other states. Contact our office at 914.287.6466 or via our online form contact-us.html