Establishing And Protecting Trade Secrets Under California Law

The California Uniform Trade Secrets Act ("UTSA") affords protection to certain proprietary and confidential business information. California courts recognize that common, everyday data can be afforded protection as a trade secret. For example, customer lists, business plans, corporate minutes and agendas, spreadsheets and competitive bid specifications can be afforded protection as trade secrets. To be eligible for trade secret protection, the company must take reasonable measures to protect the information, and the information must derive independent economic value by being kept secret. Trade secret protection is available, for example, when a former employee misappropriates or steals company trade secrets.

A variety of tools are available to enforce trade secret protection in the courts, such as temporary restraining orders and injunctions. Under the UTSA, a company is not required to show that a former employee physically took trade secret information. The UTSA actually affords protection to the contents of an employee's memory, if the information fits the definition of a trade secret. Thus, an employer need only show that the employee used or disclosed the contents of his or her memories regarding a trade secret to demonstrate that a misappropriation occurred.

To further protect their investments, companies should make certain that they take the following measures to safeguard trade secret information:

  • Make certain that contractual measures are in place to protect confidential data and trade secrets. Companies must update their confidentiality agreements and nonsolicitation provisions.
  • Establish and enforce policies regarding the use of electronic storage devices, internet use and use of the company's email system to help prevent misappropriation.
  • Remind employees, including at the time of hiring and termination, of their contractual obligations to protect confidential information and not to use or disclose trade secrets.
  • Take prompt legal action in the event trade secrets are misappropriated, or where misappropriation is threatened.

Companies should take extra cautions when hiring employees in possession of other company's trade secrets.

Contact The Rutten Law Firm, APC, In Southern California

If you have questions regarding trade secret protection and misappropriation, contact us online or call 818-308-5945 today. From our office in Studio City, we represent clients throughout Los Angeles, Orange, Riverside, San Bernardino counties, the Bay Area, and the entire state of California.