In our practice we see a fair amount of confidential information from our clients. Some of it relates to inventions that they are working on. Some relate to trademarks and efforts to protect good ideas. What can be done to protect this information especially when it is disclosed to third parties? In this blog post we discuss North Dakota’s Uniform Trade Secrets Act.
North Dakota’s Trade Secret Act
North Dakota usually adopts uniform laws as they are written by others. Of course there is the back and forth found in the legislative history but for the most part uniform laws are adopted as course in North Dakota. One of those uniform laws adopted is the Trade Secret Act, codified in the statutes as 47-25.1-01. Under the Act words have special meaning. For example, the words “trade secrets” means information or techniques which derive independent economic value from not being known by others and is the subject of efforts to maintain its secrecy. For example, the formula for Coke is not generally known and is the subject of efforts to maintain its secrecy. Furthermore, it has a value since others could copy Coke if the recipe was stolen. Other examples of trade secrets are customer lists, sales leads, methods of manufacturing and private databases.
Misappropriation of Trade Secrets
Generally a trade secret is disclosed by something called misappropriation. “Misappropriation” has special meaning under the Act. It generally means acquiring a trade secret when you know how you got it was improper. If an employee takes a business’s customer list that could be considered misappropriation of a trade secret.
Damages and Remedies
If there is an improper disclosure of trade secrets, injunctions are available to owners to stop the use of the trade secret. That means that the owner must start a lawsuit against the person disclosing or using the trade secret. Indeed, most lawsuits we see in our office have a claim for an injunction in them. Usually what happens is that there is a hearing before a judge where both sides present evidence. If there is enough evidence to convince the judge they will issue an order enjoining the person from disclosing or using the trade secrets.
Damages include the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss. In exceptional circumstances the court may award punitive damages.
In certain cases, such as willful and malicious misappropriation, the court may award attorney’s fees.
All cases must be brought within 3 years after the misappropriation was or should have been discovered.
Here at Fargo Patent and Business Law we have extensive experience dealing with trade secret issues. If you have a trade secret issue we can help. Contact us today!