Trade Secret Litigation

Federal Trade Secret Misappropriation

The Defend Trade Secrets Act (DTSA) allows an owner to bring a civil claim in federal court when the trade secret relates to a product or service used in, or intended for use in, interstate or foreign commerce. Federal law permits a court to order relief for actual or threatened misappropriation. In extraordinary circumstances, the DTSA also permits a narrowly tailored seizure order to prevent a trade secret from being disseminated.

California Trade Secret Misappropriation

The California Uniform Trade Secrets Act (CUTSA) provides a civil claim for the improper acquisition, use, or disclosure of a trade secret. California law permits injunctions against actual or threatened misappropriation and requires courts to use reasonable measures to preserve the secrecy of alleged trade secrets during litigation. In a California trade secret action, a claimant must identify the alleged trade secret with reasonable particularity before beginning discovery relating to it.

How Do Federal and California Claims Compare?

The DTSA and CUTSA use similar concepts of trade secrets and misappropriation. Both provide for injunctions and monetary relief, including actual loss, unjust enrichment, and, in appropriate circumstances, a reasonable royalty. Both allow exemplary damages of up to twice the underlying damages for willful and malicious misappropriation, and attorney’s fees in specified circumstances. Both generally require a claim to be filed within three years after the misappropriation was discovered or reasonably should have been discovered.

Preliminary Injunctions and Remedies

Because disclosure or use of a trade secret can cause immediate harm, a party may seek a temporary restraining order or preliminary injunction early in a case. The court considers whether the legal requirements for that relief are met; filing a trade secret claim does not automatically entitle a party to an injunction. A preliminary injunction can shape the course of the dispute, but it does not decide the case on the merits or mean that most trade secret cases end at that stage.

Depending on the claim and the evidence, other available remedies may include damages for actual loss and unjust enrichment, a reasonable royalty, exemplary damages, and attorney’s fees.

Defenses to Trade Secret Misappropriation

A trade secret claim depends on whether the information qualifies for protection and whether the defendant acquired, used, or disclosed it through improper means. Depending on the facts, defenses may include:

• Independent development: The defendant created or discovered the information without using the claimant’s alleged trade secret.
• Lawful reverse engineering: The defendant learned the information by examining a product it lawfully obtained, rather than through improper means.
• Information that is not secret: The information was publicly available or so broadly disseminated that it no longer derived value from being secret. Disclosure to selected people under confidentiality obligations, however, does not necessarily destroy trade secret protection.
• Insufficient secrecy measures: The claimant did not take reasonable steps under the circumstances to protect the information.
• Authorization or lack of use: The challenged conduct was permitted by an agreement or other authorization, or the defendant did not acquire, use, or disclose the alleged trade secret as claimed.

Independent development and reverse engineering are recognized lawful means of obtaining information under both federal and California trade secret law. Whether information remained secret, and whether the owner took reasonable measures to protect it, require a fact-specific review.

Torani Law P.C. represents clients in trade secret disputes involving the protection, enforcement, and defense of confidential business information. We evaluate whether the information qualifies as a trade secret, the measures taken to protect it, the alleged acquisition or use, potential defenses, and available remedies to develop a litigation strategy suited to the client’s objectives.