There is certain information that your business would like to keep secret. Perhaps you have a process for doing things, a formula, a program, or data that is valuable to your business. Other people don’t know about these secrets, they can’t be easily (or legally) figured out, and you have taken steps to maintain the secrecy.
If all of this is true, then the information is known as a trade secret.
Kentucky Law Prohibits the Misappropriation of Trade Secrets
Kentucky, like most states, has adopted a version of the Uniform Trade Secrets Act in order to protect businesses in the state from trade secret violations. Generally, there are two ways that a trade secret can be violated or misappropriated pursuant to Kentucky’s Trade Secrets Act.
Acquiring a Trade Secret Through Improper Means Is Misappropriation
It violates Kentucky law to acquire a trade secret that is known (or should be known) to be a trade secret obtained through improper means. According to the statute, “‘Improper means’ includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.”
In order to be successful in a trade secret case, it is important to prove that the secret was gained through improper means. This means that someone else did something wrong—and that you were not simply careless with your own information. Some examples of improper means include:
- Violation of an employee confidentiality agreement.
- Spying or stealing information by an employee or outside person.
- Breach of a non-disclosure agreement.
- Breach of a license agreement.
Simply acquiring a trade secret in any of these ways violates the law, whether or not the trade secret was actually used once it was acquired.
Disclosing a Trade Secret Without Consent Is Also Misappropriation
Of course, disclosing a trade secret without consent of the person or business that holds the trade secret can also be a violation of the law. The Kentucky statute describes three ways that this type of violation may occur:
- First, if improper means were used to acquire the trade secret and then the trade secret was disclosed, then it would violate the statute.
- Second, if the person disclosing the information knew or had reason to know that his knowledge of the trade secret was derived from someone who used improper means to learn the trade secret, acquired under circumstances that gave rise to a duty to maintain its secrecy, or learned from someone who had a duty to maintain its secrecy, then it would violate the statute.
- Third, if the person disclosing the secret had a material change in position and knew or had reason to know that the trade secret had been learned by accident or by mistake, then it would violate the statute.
Any of these types of trade secret misappropriations can cause your business significant financial harm.
What You Need to Know If Your Trade Secret Has Been Violated
Pursuant to Kentucky law, you have three years to file a lawsuit from the time that you find out about the trade secret misappropriation or the time that you should have reasonably known about the trade secret misappropriation. A court may grant you injunctive relief and, if possible, prevent the person or business that misappropriated your trade secret from benefiting from the information. Additionally, a court may award you damages to compensate you for the harm that was done by the trade secret violation. Damages may include compensation for your actual losses and for unjust enrichment. If the trade secret was taken willfully and maliciously, then you may also include punitive damages. In some cases, your attorney’s fees may also be paid by the person or business that misappropriated your trade secret.
If your business has suffered because someone else stole, violated, or misappropriated a trade secret, then you need to take action today. Violating a trade secret is a federal crime that a person may be imprisoned for committing. However, in order to protect your business interests, you need to take private action.
Our experienced business litigation lawyers would be pleased to provide you with a free consultation about your rights and about the possible next steps you can take to protect those rights. Our nationally recognized lawyers take on complex cases and are committed to helping Kentucky businesses get the fair treatment that they deserve pursuant to the law.
For more information, please contact us any time—24/7/365—via this website or call us directly. Additionally, we invite you to download a complimentary copy of our book, The Legal Guide to Business and Contract Disputes, to learn more about protecting your business.