Finance

The Perils of Employees’ Trade Secret Plundering

Bloggerping / February 15, 2021
The Perils of Employees' Trade Secret Plundering

Sometimes new employees leave their jobs to join your company, they mimic valuable company secret information on portable thumb drives or they send that information to their personal web accounts.

As a new employer, you can hire those employees, because they have valuable information – yet if you don’t want to be targeted by a lawsuit, then with employees, you don’t want them to provide you, Or use, trade secrets of their former employers.

What is a trade secret?

A trade secret is, basically, any confidential and proprietary business information that a company rewards and thinks it gives some business advantage over competitors. This may include details about customers, business plans for the future, market trends and the like.

The most well-known business information held as a trade secret is the formula for Coke. This is a trade secret because the formula is what makes coke, well, coke.

If a company complies with the Uniform Trade Secret Act, it will help ensure that protecting trade information will be considered a trade secret. Seven states have adopted the Uniform Trade Secret Act.

Compliance with these trade secret laws requires that employees and third parties who have access to trade secrets that are shared with them sign some form of non-disclosure agreement, or NDA, and That trade secret owners use documents that seek to protect using this term. “Secret,” “Confidential,” or “Proprietary.” If done, these two tasks will help protect the rights of the trade secret owner.

Two or more companies may develop similar trade secrets, which they are entitled to protect, unless they make illegal use of someone else’s trade secret, although obtained.

What is not a trade secret?

Public information, such as published by a news source such as The Wall Street Journal or Bloomberg, is not a trade secret, because once the information is public it cannot be a secret.

Of course, the author or publisher of that information owns the copyright to the published information, although this article does not address possible copyright issues.

What is litigation?

Companies have always been waging a court battle over the disclosure of trade secrets – about matters as diverse as the theft of chemical formulas, computer source code and customer contact information.

Often, litigation between former and current employers with trade secrets leads to allegations of copyright and trademark infringement. This is because even if the court does not consider a company’s claimed trade secret to be a trade secret, copyright and trademark claims are not affected by any such determination and may still exist.

Jobon accused Fitbit

Jobon has alleged that “in early 2015, Fitbit recruiters approached an estimated 30 percent of Jobone’s workforce” and that “Fitbit aims to explain Jobon.”

The New York Times reported, “Jaws gave its employees confidential information to” systematically rob “, employing Jobon’s employees, which improperly sent sensitive content shortly before leaving Was downloaded from. ”

As most lawsuits settle, we can never learn what Fitbit allegedly stole, but this lawsuit helps demonstrate the competitive market for the Internet of Things.

AutoCAD Litigation: Are Former Employees Responsible?

Autodesk sued China’s ZWCAD Software and its US distributor last year in federal court in the Northern District of California for trade secrets and copyright infringement.

In its complaint, Autodesk claims that ZWCAD is engaged in making bulk copies of “large portions of Autodesk source code” to build its software programs, and that ZWCAD “entices customers into copying … marketing materials.” There is a way.

Products, “and thereby leverage Autodesk’s trade secrets and copyrights.

There are a few ways to get the source code of another product. The two obvious methods are 1) for the reverse engineer, which would be a breach of software license and / or illegal (because trade secret theft is a crime); Or 2) to hire employees who have illegally copied it.

Although AutoCAD did not clearly clarify how it believed its source code (its trade secret) was allegedly created incorrectly, it is possible that as the case progresses, it could suggest Is that it was somehow provided by former AutoCAD employees. It will be interesting to follow this case.

In conclusion

Theft of trade secret accusations are very old news in the technology market, but legal claims continue to come up somehow.

Protecting trade secrets from employee theft, and preventing new employees from sharing what they should not share, would go a long way toward reducing the need for litigation.

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