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Trade secret misappropriation occurs when a trade secret has been wrongfully taken or disclosed without consent. A trade secret is defined as information (1) that derives independent economic value from not being generally known, and (2) which has been the subject of reasonable efforts to be kept a secret.
A plaintiff in a trade secret misappropriation case must show that the information was not in the public domain and that the owner of the alleged trade secret took reasonable measures to maintain its secrecy. Information cannot constitute a trade secret unless it gives the owner a competitive advantage.
Misappropriation occurs when a trade secret is improperly acquired or disclosed. If a person or entity discloses or publishes a trade secret while knowing it was improperly obtained, or by inducing someone to improperly obtain it, misappropriation exists.
Under §1832(a) of the Economic Espionage Act, misappropriating a trade secret used in interstate commerce or foreign commerce may result in fines or imprisonment.
In the United States, trade secrets are defined and protected by the Economic Espionage Act of 1996 (outlined in Title 18, Part I, Chapter 90 of the U.S. Code) and also fall under state jurisdiction. As a result of a 1974 ruling, each state may adopt its own trade secret rules.
More confusingly, different statute of limitations laws apply, and the remedies available to aggrieved parties are inconsistent. The federal trade secrets act created a uniform body of federal trade secret misappropriation laws and established jurisdiction for these lawsuits to be heard in federal court.
18 U.S.C. § 1836(b)(1) (?IN GENERAL. ?An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.?).
The remedies for companies suing former employees for trade-secret misappropriation under the DTSA include punitive damages and attorney fees. In order to take advantage of these remedies, however, a company must advise its employees of the existence of the whistleblower immunity.