Idea Litigation: When Can You Sue For Theft Of A Trade Secret?

by Fred Abramson on August 15, 2013 · 0 comments

Ideas are power. With power comes money. We all have ideas and we usually share them with others. With the explosive growth of the internet, anyone with the ability to code can take an idea and make it into a huge business. When that happens, can you sue?

Entrepreneurs and owners of small businesses are often not aware that there are remedies in tort law that can help in the event that an idea has been stolen. Unless there is non-disclosure agreement or some other contract, tort causes of action are often overlooked. The two major causes of action are:

1. Misappropriation of Trade Secrets;
2. Tortious Interference with a Contract.

What is Misappropriation of Trade Secrets?

Generally, a trade secret is any information that can be used in the operation of a business and that is sufficiently valuable and secret to allow an actual or potential economic advantage over others. Be aware that the idea must be secret.

What Type of Trade Secrets can be Covered?

1. Marketing.
-Customer lists are covered, however, you must prove that the lists are secret.
-Wholesale lists. Not usually covered because they are not usually secret.
-Pricing models and purchasing information.
-Secret business plans and business strategies.
-Data on how customers are payed.
2. Product Designs.
3. Production and Operations. Generally, information on how to make and produce a product is protected.
4. Research and development.
5. Secret compilation of facts that are known to the public.

What should you do to make sure that your ideas are secret?

1. Reduce all ideas to writing.
2. Make sure no one in your company disseminates the information to the pubic.
3. Have all employees sign an confidentiality agreement.
4. Make sure that all the information is secure.

Tortious Interference with a contract

What happens if one of your employees who has knowledge of your company’s ideas and trade secrets is hired by a competitor and the competitor uses your ideas for competitive advantage? You can sue for tortious interference with a contract. You may have a case if:

1. There is a existing contract that is subject to interference.
2. The third party (in the example of above, the new employer) has knowledge or should have knowledge of the contract.
3. Intentionally interfered with the contract.

If you have a question regarding theft of ideas in New York, call the Law Office of Frederic R. Abramson at 212-233-0666

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