What is a Trade Secret in Massachusetts?
What amounts to a trade secret is defined below. In a nutshell, in Massachusetts, a trade secret is just about anything that might be used by a person or company for some form of profit where that “secret” was protected, or an attempt was made to protect it, by the company claiming the trade secret.
If you own a business in Massachusetts, consider the importance of acquiring nondisclosure agreements for your employees and including such clauses or contracts in your contracts with vendors and others who may have access to trade secrets. Contact attorney Gaudet for more information on these matters.
(4) ”Trade secret”, specified or specifiable information, whether or not fixed in tangible form or embodied in any tangible thing, including but not limited to a formula, pattern, compilation, program, device, method, technique, process, business strategy, customer list, invention, or scientific, technical, financial or customer data that
(i) at the time of the alleged misappropriation, provided economic advantage, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, others who might obtain economic advantage from its acquisition, disclosure or use; and
(ii) at the time of the alleged misappropriation was the subject of efforts that were reasonable under the circumstances, which may include reasonable notice, to protect against it being acquired, disclosed or used without the consent of the person properly asserting rights therein or such person’s predecessor in interest.
MGL c93 s42(4)
Remedies – What Can a Massachusetts Business Do to Protect Trade Secrets?
Injunctive Relief
Massachusetts courts may allow the remedy of an injunction, either on a temporary basis or permanently where the trade secrets of a business have been or may be (in the future) compromised. Most importantly, to take advantage of an injunction, your business need not wait until the damage has happened. It is possible by taking action in the Massachusetts courts to stop an employee or even another business that threatens to expose or misappropriate trade secrets.
When considering imposing an injunction upon a person or business, the Massachusetts courts will consider the conduct of the parties involved, the current circumstances (surrounding the use of the trade secret or secrets). If awarded by a court, the injunction will typically last until the use of the trade secret has ended or for a period of time long enough to stop any economic advantage to the party misappropriating the trade secret.
Courts in Massachusetts may allow the use of a trade secret by one party if that use is conditioned upon payment of a royalty to the business that owns the trade secret. Such an agreement might be made privately between the parties or in the court setting.
Damages
Where a Massachusetts Court finds that no equitable remedy is available, for example, where an injunction would not be an appropriate court award, the Court may award damages to the injured party. Damages for misappropriation of a trade secret would likely include any actual loss incurred, and the degree to which the party that has misappropriated the trade secret has been unjustly enriched.
If a business is able to demonstrate to the court that the misappropriation of a trade secret was willful or malicious, the court may award up to double damages to the injured party. Contact us at 978-273-8337 for assistance with protecting a trade secret in advance with contracts that clearly and expressly declare information as trade secrets, and for assistance when the damage is done.
Attorney’s Fees
If your business is the party to a lawsuit which has filed for an injunction with the court for the misappropriation of a trade secret and you believe that the other side to the lawsuit has resisted a motion for an injunction in bad faith, your company may be able to receive an award for any and all attorney’s fees that you have paid. In addition, and perhaps more importantly, where one party has willfully and maliciously misappropriated trade secrets payment of attorneys fees can be sought from the party that has willfully or maliciously misappropriated trade secrets.
Statute of Limitations
Your business has three years from the discovery of the misappropriation or where, with reasonable due diligence, the misappropriation should have been discovered. Again, contact our offices and Attorney Gaudet to ensure that your business can preserve its claim that trade secrets where misappropriated. Or, in the alternative, protect the interests of your business by entering into contracts with vendors, employees and others before a problem occurs by formulating language which serves to protect these trade interests.
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