Question

. Misappropriation - If a trade secret is taken through unlawful means, like theft, it is a tort which can lead to profit recovery, damages and usually an injunction.

Give me an example of how this would work in the ‘real world’?

Answer 1

TRADE SECRET

Any kind of information is capable of being protected as a “trade secret”. Anything to qualify as a trade secret must be kept secret and it is kept secret because of its economic value.

As there is no specific criteria to decide if an information is capable of being protected under trade secrets or not, hence it is quite difficult to define precisely as what all can be protected as a trade secret. However, trade protection is commonly claimed for manufacturing know-how, commercial, formulas, bid-prices, technical designs.

An essential requirement to secure trade secret protection is that the information should provide some economic advantage to the secret keeper over its competitors.

For example; the formula to make Coca-Cola is kept secret, as if made public or leaked will result in its competitors using the same formula to make the soft drink, which would in turn result in losses to Coca Cola and also will affect its market position.

However, public information can not be keep a secret and can not be protected as a trade secret no matter how economically valuable it is.

MISAPPROPRIATION

Trade secrets are protected against any sort of misappropriations, the unauthorized taking or copying of information which by way of trade secret protection is protected. Misappropriation is generally a tort, but can be a criminal act too under certain circumstances. Misappropriation can be in any form such as wiretapping or theft.

For example: In a famous lawsuit of US on trade secret theft, a chemical company was building a plant, which was so being constructed with a secret process. The process which was being used was not known to anyone and hence was a trade secret. After reaching at a particular stage of construction the details of the process could be possibly seen through the roof of the building. A competitor of the chemical company in order to know the process, hired a small plane to fly over the plant, get to know the details and also to take photos. Although the act of flying over someone’s property is not considered trespassing, this act was still held to be qualified as misappropriation, because the sole act was performed explicitly aiming to circumvent the precautions of the chemical company to protect its secret process and to get hold of the details of the secret process used by the chemical company.

Liability for misappropriators of Trade Secret

A person who misappropriated a trade secret is liable for damages. Furthermore, the owner of the information can apply for injunction to stop the person from using the information. But if meanwhile, a lot of people have managed to legitimately acquire the protected knowledge or information, then the court is not much inclined towards awarding an injunction. In such cases, the only remedy is compensation for the damages suffered by the owner because of the loss of the trade secret. These damages can be ascertained in terms of profit made by the misappropriator.

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