Law and Practice
Elgar Intellectual Property Law and Practice series
Business-to-business relationships are not the only, or even the principal, type of relationship that trade secret owners must consider when developing a trade secret protection strategy. Statistically, most of the trade secret cases filed in the United States arise out of the employment relationship. The typical story involves an employee who leaves the employ of one company to work with a competitor or to start her own business and is accused of taking her former employer’s trade secrets with her. Without proper planning, this scenario can result in bad outcomes for a trade secret owner, not only from a legal perspective but from a practical perspective. As with business-to-business relationships, the existence of a duty of confidentiality is a key component of any trade secret protection strategy related to employees. However, just because an individual works for a company does not mean that they owe a duty of confidentiality with respect to specific (or any) trade secrets. This is because a critical component of trade secret protection in the workplace requires employees to be informed of the applicable expectations of secrecy with respect to the information that they handle. Sometimes an implied duty of confidentiality will be found, but not always. Thus, as with business-to-business relationships, the best practice is to obtain an express written confidentiality agreement from each employee who is given access to trade secrets and other proprietary information.
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