Philadelphia Employment Lawyers

Trade Secret Protection

A trade secret is any type of information that benefits a company or business commercially and is kept secret by the employer and employees. Trade secrets may include any formulas, patterns, compilations, programs, devices, methods, techniques, or processes that have been part of the research and development of a company’s products or services.

In this age of technology, with privileged information accessible every second, the prevalence of trade secrets is even more common because businesses must remain ahead of the game.

Sidney L. Gold & Associates Trade Secret Protection Lawyers counsel employees on acknowledging and complying with trade secrets and on the importance of maintaining their secrecy. Whether or not an employee signs a binding confidentiality or non-disclosure agreement, the employee may be held liable if entrusted company secrets are released.

Possible Consequences

Employers may file lawsuits against any employee they believe breached their trust by disclosing the confidential information or by using it for unlawful purposes. If an employee is found guilty of disclosing a valuable trade secret, tough penalties may be brought against the employee, which may result in damage compensation for the employer filing an injunction against the employee. Employees may experience personal and professional ruin if accusations and claims are brought against them, which could sabotage their future career endeavors and their livelihoods.

Determining Trade Secrets

In a court of law, several factors will be examined to determine if the information in question is considered a company trade secret. These factors include if the information is known beyond the business; if it is known by all employees within the company; what methods the business used to protect the information from release; and how valuable the information is to the company itself or to any competitors.

Another factor is if the information is covered under a non-disclosure agreement. Courts will further analyze the amount of money and the effort that went into researching and developing the confidential information or product. They also will gauge how easily accessible the information is to any other groups or individuals.

The Computer Fraud and Abuse Act

If employers express interest in filing a lawsuit against an employee regarding trade secret infringement, they may file charges against the employee under the Computer Fraud and Abuse Act (CFAA). In some cases, this accusation may be difficult to defend for an employee who discovered the confidential information during unauthorized use of the company’s computers.

However, if an employer accuses an employee of CFAA for retaliatory purposes, the employee may be entitled to damages. It is strongly recommended that an employee involved in a trade secret disclosure case, which may be accompanied by stiff penalties, consult with an experienced lawyer who will counsel the individual in successfully resolving their case.

Relevant Legislation in New Jersey and Pennsylvania

Both New Jersey and Pennsylvania adopted the Uniform Trade Secrets Act (UTSA), and refer to the “theft of trade secrets” as misappropriation. In both states, even if the company or business in question is unaware that they possessed stolen trade secrets, they still may be prosecuted as if they did know the status of the information.

According to federal law, the Economic Espionage Act of 1996, which applies in both New Jersey and Pennsylvania, establishes trade secret theft as a federal crime. The Act states that theft of a trade secret is prohibited, and that it is a federal crime to receive, buy, or possess the trade secret, specifically when it is acknowledged that it is stolen. Depending on the circumstances, and whether the perpetrator is an individual or a corporation, the party at fault could receive penalties, including a potential prison term of up to 15 years and fines of up to five million dollars.