What Happens if Someone Steals a Trade Secret?
Consequences, Prevention, and What to Do If It Happens to You
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What Happens if Someone Steals a Trade Secret?
Trade secrets are valuable pieces of information that give businesses a competitive advantage. They can include anything from formulas and recipes to manufacturing processes and marketing strategies. When a trade secret is stolen, it can have a devastating impact on a business.
What is a Trade Secret?
A trade secret is any information that has commercial value because it is not generally known to the public and the business owner has taken reasonable steps to keep it secret. Trade secrets can include a wide range of information, such as:
Formulas and recipes
Manufacturing processes
Customer lists
Business plans
Marketing strategies
Proprietary software code
What Happens if Someone Steals a Trade Secret?
If someone steals a trade secret, the owner of the trade secret can take legal action against the thief. This can include both civil and criminal lawsuits.
In a civil lawsuit, the trade secret owner can seek damages for the losses they have suffered as a result of the theft. These losses can include lost profits, reduced market share, and the cost of developing new trade secrets.
In a criminal lawsuit, the thief can be charged with trade secret theft. This is a federal crime that can be punishable by up to 10 years in prison and a fine of up to $500,000.
Examples of Trade Secret Theft
There have been many high-profile cases of trade secret theft in recent years. For example, in 2018, a former employee of Apple was convicted of stealing trade secrets related to the iPhone X. The employee was sentenced to 9 months in prison and ordered to pay Apple $800,000 in damages.
In another case, in 2019, a Chinese company was found guilty of stealing trade secrets from T-Mobile. The company was ordered to pay T-Mobile $4.8 billion in damages.
How to Protect Your Trade Secrets
There are a number of things that businesses can do to protect their trade secrets, including:
Keep your trade secrets confidential. Only share your trade secrets with employees and contractors who need to know them.
Use confidentiality agreements. Have employees and contractors sign confidentiality agreements before they are given access to your trade secrets.
Use physical security measures. Keep your trade secrets locked up and secure.
Monitor your employees and contractors. Keep an eye out for any suspicious behavior, such as employees downloading large amounts of data or emailing trade secrets to competitors.
What to Do if You Suspect Trade Secret Theft
If you suspect that someone has stolen your trade secret, you should take immediate action. First, you should secure the trade secret and prevent it from being further disclosed. You should also contact an attorney to discuss your legal options.
Conclusion
Trade secret theft is a serious crime that can have a devastating impact on businesses. If you have any reason to suspect that your trade secrets have been stolen, you should take immediate action to protect your business.
Additional Information
In addition to the above, here are some other things to keep in mind about trade secret theft:
Trade secret theft can be committed by anyone. This includes employees, contractors, competitors, and even foreign governments.
Trade secret theft can be difficult to detect. Thieves often go to great lengths to conceal their activities.
Even if you are able to detect trade secret theft, it can be difficult to prove. This is because trade secrets are often confidential and there may be limited evidence available.
Trade secret theft can have a significant financial impact on businesses. In addition to lost profits and reduced market share, businesses may also have to invest in new security measures and develop new trade secrets.
If you are a business owner, it is important to take steps to protect your trade secrets. This includes having a trade secret protection plan in place and training your employees on trade secret security.
Information published to or by The Industry Leader will never constitute legal, financial or business advice of any kind, nor should it ever be misconstrued or relied on as such. For individualized support for yourself or your business, we strongly encourage you to seek appropriate counsel.
