Trade secrets only have value as long as they stay secret, so once they come into a competitor’s hands or become publicly available, their value is often destroyed.
Few employees realize that when they take their employers’ trade secrets with them prior to leaving their job they may be exposing themselves to criminal liability under the Economic Espionage Act, which makes it a crime to steal trade secrets when (1) the information relates to a product in interstate or foreign commerce (which is virtually any product now days) or (2) the intended beneficiary is a foreign power.
A court order prohibiting defendant from using trade secrets must be broad enough to cover all possible circumstances while narrow enough to include only the illegal activities. Where that line lies depends on the circumstances of each particular case.
What a lot of companies do not realize, however, is that if they wait too long to ask for an injunction after finding out about the employee’s competitive activities, a court may deny their request simply because they waited too long
The business world is littered with the carcasses of companies which, after they shared their confidential information and trade secrets with a non-competitor, such as their client, supplier, or vendor, were undercut by that party, who all of a sudden realized that they could profit from the information by cutting out the middle-man.
The Fifth Circuit recently considered whether the federal copyright and patent laws preempt (trump) Texas common law claim of unfair competition by misappropriation.