Sunday, August 29, 2010

What is a "trade secret" and how can it result in a lawsuit

Ohio has what is a called a "trade secret" statute - a statute that seeks to define and control valuable sensitive information that businesses take time to develop and protect. Contractors and employees of business that own these trade secrets can sometimes use or even steal that data (called "misappropriation") - and such misappropriation can often lead to litigation. Often trade secret litigation can involve what are called "temporary restraining orders," which are orders issued in the very beginning of a lawsuit (vs. at the end of the lawsuit) to control the activities of individuals while the lawsuit is pending. When a trade secret lawsuit is first filed, the owners of trade secrets look to have a court essentially restrain the alleged users or thieves from using that data while the lawsuit is pending. The ultimate relief sought in the lawsuit is usually damages and/or a permanent injunction forever barring the defendants from possible (or further) appropriation of the data.
However, in order for something to constitute a "trade secret," the data must actually be valuable (having what is called "ascertainable" value) and the owner of that data must take "reasonable efforts" to keep that data secret.
Business owners need to take specific steps to develop and protect their trade secrets, which includes written provisions in contracts for all of those who come into contact with the data. These contracts need to identify just what the protected information is, and those contracts should also include provisions where the persons coming into contact with the data consent to litigation restraining orders and specifically set amounts of damages for any attempts at improper use or theft of that data.

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