Protecting Your Business’s Trade Secrets
Trade secrets can be crucial assets to your company. When a trade secret has been misappropriated, a business can seek an injunction and monetary damages.
Under Maryland Commercial Law, a trade secret is defined as information such as a formula, pattern, program, device, technique or process that “derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use? and “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.? In other words, it is a valuable method, formula, etc., that you have made an effort to keep secret. Trade secrets are different from patents, copyrights and trademarks. For one, there is no time limit on trade secrets. Secondly, a company need not register a trade secret.
There are some important things to know as a business owner about protecting trade secrets and enforcing the law against someone misappropriating them:
- An injunction is a common remedy for misappropriation. Actual and even threatened misappropriation may be enjoined.
- The court can terminate an injunction when the trade secret ceases to exist.
- The court may order a defendant to take affirmative steps to protect a trade secret. The court also preserves the secrecy of trade secrets during the pendency of litigation.
- Monetary damages are another popular remedy for misappropriation of trade secrets. Money can be awarded for:
- The actual loss caused by misappropriation.
- The unjust enrichment caused by misappropriation.
- Liability for the equivalent of a reasonable royalty for the unauthorized disclosure or use of a plaintiff’s trade secret.
- If the court finds that the defendant willfully and maliciously misappropriated the trade secret, it can punish a defendant by awarding exemplary damages, which can be up to double monetary damages.
- The court can award attorney’s fees to the prevailing party in a trade secrets matter where:
- A claim of misappropriation is made in bad faith.
- A motion to terminate an injunction is made or resisted in bad faith.
- Where willful and malicious misappropriation exists.
Understanding how to legally protect your business’s trade secrets is crucial. Contact an experienced business law attorney for knowledgeable legal guidance.