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Trade Secrets: Business/Commercial Litigation/Disputes

Trade secret disputes usually involves high dollar litigation. Defining what constitutes a “trade secret” is a difficult trick. In broad, plain terms, trade secrets are pieces of information or documentation which are a given business’s work product and which it uses to compete in a particular marketplace.

In more precise terms, the Missouri Uniform Trade Secrets act defines a trade secret as a (1) compilation of data which derives independence economic value, actual or potential; (2) it is not generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and the (3) individual/business who maintains the trade secret has undertaken reasonable effort to maintain secrecy.

McDonald’s recipes for its food likely constitute a valid trade secret. Internal procedures businesses use to operate will usually also count as a trade secret, so long as that individual business can demonstrate the above requirements. Trade secrets are extremely important, then, in that they are the things businesses use to be profitable, maintain a competitive edge, and engender good will.

Given the importance of trade secrets, Missouri law imposes severe sanctions on individuals who violate or disclose a business’s trade secrets. A restraining order and preliminary/permanent injunctive relief may be ordered by a Court pursuant to § 417.450 and § 415.455 R.S.Mo. In other words, the Court may order an individual or business to stop all of their activity and return any confidential or proprietary trade secrets. Furthermore, a knowing misappropriation of trade secrets which evidences a reckless disregard for the rights of another may lead to the imposition of punitive damages pursuant to § 417.457 R.S.Mo.

Because of the expensive and complicated nature of trade secret disputes, company’s will often have their employees sign a Covenant Not to Compete Agreement, or other types non-solicitation or Non-Compete Agreements, in order to prevent such problems. Although this sounds great in theory, it sometimes compounds the problem because such agreements in and of themselves are usually subject to close scrutiny.

Contact us if you have any questions or issues pertaining to trade secrets, or other forms of business/commercial disputes.

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