Some companies maintain a successful business by dealing in trade secrets and having certain recipes, formulas, and processes under serious lock and key. If these trade secrets are stolen and revealed to the public, the resulting fallout could seriously damage the company whose secrets are now public knowledge. There have been multiple trade secret violations across the world and throughout modern history. You may be asking: What is an example of a trade secret violation?
An Example of a Trade Secret Violation
Trade secrets are frequently in danger of being revealed by disgruntled employees, potential blackmailers, or just opportunistic people with an ax to grind. If you ever find yourself in a position where one of your trade secrets has been violated, reach out to an Orange County trade secret attorney.
One of the most infamous examples of a trade secret violation was an incident that occurred in 2006 when an employee of Coca-Cola tried to sell a secret formula for a new product to Coke’s biggest competitor, Pepsi.
An assistant working at Coca-Cola’s global headquarters stole a vial of a new product formula and attempted to sell it to Pepsi for a reported $1.5 million in a seemingly misguided attempt to reignite the Cola Wars of the 1980s. It backfired horribly when Pepsi executives immediately reported the espionage to the FBI, who arrested the perpetrator in a prolonged sting operation. The perpetrator and her two accomplices were arrested and charged with selling trade secrets.
What Is a Trade Secret?
A trade secret is an intellectual property right containing confidential information that the intellectual property owner may sell or license. Not every company secret qualifies as a trade secret. It has to meet certain criteria first, such as:
- It must be considered commercially valuable due to its secretive nature.
- It must be known only to a select group of people who are legally bound not to reveal it or unlawfully sell it.
- Reasonable steps have been taken by the rightful trade secret owner to keep it secret through the use of confidentiality agreements, among other steps.
Any confidential business information or product formula that provides a potential competitive edge if competitors were to know it can be considered a viable trade secret. This could be technical, commercial, or a combination of the two.
Trade secrets are protected without the need to establish and own a patent. They can be protected indefinitely, with no expiration date regarding their secrecy. The only way it becomes known is if someone steals the secret and releases it to the public or if it is legally revealed by the owner.
Trade secrets are essential to the competitive market of certain industries. They encourage competition and help the demand of the economy by driving consumer interest. Every company that develops a product has to keep up with demand, as well as ensure that their trade secrets do not become public, as knowledge of the inner workings of certain companies could damage their bottom line and their reputation.
FAQs
Q: What Are Violations of Trade Secrets?
A: A trade secret violation occurs when someone obtains industry secrets in an unfair or illegal way with the intention of selling them without permission. They can be acquired and misused in multiple ways, including:
- Acquiring trade secrets by improper means through a confidentiality agreement violation.
- Using a trade secret for a different use beyond the purpose for which it was intended.
- Disclosing a trade secret to another employee who is not supposed to know about it.
Q: What Is an Example of a Trade Secret Infringement?
A: There are multiple ways that a trade secret can be infringed upon or violated by people who are not supposed to have access to that information. Some examples of trade secret infringement include:
- Hacking a company’s secure server to access confidential documents.
- Taking secure or confidential information home from work without prior approval.
- Making copies of confidential business files that could jeopardize the business.
- Publishing trade secrets in an online blog or a memoir.
- Reverse engineering a company’s product to try and find out how it works.
Q: How Can You Protect a Trade Secret?
A: There are multiple preventative measures that a company can take to ensure the protection of its trade secrets. Some of those preventative measures include:
- Non-Disclosure Agreements (NDAs): Many companies use these to legally bind their employees from sharing the details of any confidential information.
- Non-Compete Agreements (NCAs): Many companies also use these to ensure that their employees cannot work for any competitors once their term of employment ends.
- Invest in security infrastructure.
Q: What Term Is Used When a Trade Secret Is Violated?
A: The industry term for when a trade secret is violated is “misappropriation.” This occurs when someone acquires a trade secret in an improper fashion or discloses a trade secret without the consent of the trade secret’s legal owner. A trade secret is misappropriated whenever the secret is revealed through the use of illegal means, such as bribery, blackmail, theft, or some sort of illegal misrepresentation. The law largely protects industry secrets.
Reach Out to a Trade Secrets Attorney Today
Every company reserves the right to protect its trade secrets for the preservation of the company’s reputation and intellectual property. When a company’s trade secrets are violated, misappropriated, or otherwise infringed upon, it can have long-lasting effects on the company’s financial and commercial future. Protecting those trade secrets is vitally important and ensuring they cannot be taken from you and used against you.
At The Myers Law Group, we are determined to help companies maintain and protect their trade secrets by providing indispensable legal assistance under the Uniform Trade Secrets Act. We can help you gather evidence that supports your position, provide fast and effective legal action against those who have infringed upon your company’s rights, and answer any questions you may have. Contact us to speak to a team member right away.