Understanding California’s Uniform Trade Secrets Act

Glenn W. Peterson

From small business owners to people who are responsible for running larger corporations, companies are protected under California’s Uniform Trade Secrets Act. This law prohibits people and/or businesses from obtaining a company’s trade secrets and using them in an improper manner. At Millstone, Peterson & Watts, LLP, we understand the importance of trade secrets to a company’s ultimate success and how damaging it can be to a business if this information is released into the wrong hands.

According to California Civil Code, companies can file a legal claim with the court within three years upon discovering that a trade secret has been used in a malicious way. This means that a person or business could obtain classified business information, such as a secret process, supplier list, financial data, formula, plan, pattern, design, computer software or personnel information, and publish that information or sell it to another company in an attempt to gain an advantage. Mishandling of a trade secret may inadvertently take away from a company’s potential profit or could destroy a business altogether. In order for the information to be considered a trade secret, however, the company must make an effort to keep it classified.

If a claim is filed and the court rules that the information was indeed obtained and used inappropriately, it may decide to impose an injunctive relief. The company responsible for inappropriately obtaining the data must cease using the trade secret information immediately. The responsible party may also be ordered to pay damages and attorneys fee.

For more information on trade secret litigation, please visit our page on intellectual property.