A trade secret is not simply any piece of knowledge about a company. Broadly speaking, confidential business information that provides a competitive edge may be considered a trade secret. It is information that derives financial or economic value from not being generally known to others who could profit from it.
Examples of trade secrets can include:
- Client lists,
- Business plans,
- Financial information,
- Unannounced products that derive commercial value from being kept secret.
How Do I Know It’s a Trade Secret?
In order to qualify as a trade secret, a business must take reasonable efforts to maintain its secrecy. The trade secret no longer exists when it becomes common knowledge. If your former employer is claiming you shared a trade secret, the employer needs to be able to show that she/he took reasonable efforts to maintain secrecy (including restricting access on a “need to know” or “need to use” basis and informing employees that it is secret). In other words, if your California employer has not protected it’s company information and/or did not inform you that the information you are receiving is confidential, it may not be considered a trade secret and a claim against you for trade secret misappropriation may not be valid.
Tech and Trade Secrets
A trade secret is a significant form of intellectual property that is increasingly the subject of lawsuits, especially in California’s vibrant tech industry. How can, you, the employee, safely move from one company to another or leave one company to start a new enterprise without incurring trade secret misappropriation claims? After all, you cannot unlearn what you have learned about working at a company, and you cannot force yourself to forget names of your employer’s contacts.