question.jpgIn Trade Secrets

What are the remedies for trade secret misappropriation?

If you succeed in a case for trade secret misappropriation, you are entitled to damages, which may include financial damages you suffered as well as profits the other party received. You may also be entitled to punitive damages (of up to two times the amount of actual damage) and attorneys’ fees, if you can show that the other party acted in bad faith (i.e., that its actions were willful and malicious).

Often times, you will also be entitled to some form of injunctive relief. If the information is still a protectable secret (for example, where the other party has not publicly disclosed it), the court can order the other party to discontinue using or sharing the protected information. Typically, this injunction will not last forever; instead, the court will set the time period equal to the length of time it would take someone to reverse engineer the trade secret or to independently create it. This means that the more creative and complicated the trade secret, the longer the injunction will generally last.

Where the information has been publicly disclosed, or where its trade secret status has already been lost (for example, if it has been properly reverse engineered), you may still be entitled to some injunctive relief; this varies state to state. Some courts will not grant you any injunctive relief on the basis that the information is “out there.” Other courts will still grant a permanent injunction against the other party, even though the rest of the world is free to use the information, as a punishment for their wrongdoing in publicly disclosing the information. Most courts, however, take a middle ground between these two extreme positions - they will grant an injunction for a “head start” period of time. Because the other party got the benefit of acquiring or learning this information before the rest of the public, they got a head start. Thus, the court will grant an injunction for a period of time equal to the time from when they got the trade secret to when the trade secret became public, thereby nullifying the advantage they gained by having a head start.