May 3, 2021

If you grew up in the era of Spongebob, or had children that watched it in the background, you’ve inevitably heard Plankton tell Spongebob, “Ravioli, ravioli, give me the formuoli!” Plankton was trying to get his hands on the famous Krusty Krab burger recipe, a trade secret known only to Mr. Krabs.

What is a Trade Secret?
California Civil Code section 3426.1(d) defines a trade secret as:

information, including a formula, pattern, compilation, program, device, method, technique, or process that (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Trade secrets tend to contain either technical or business information. Therefore, common examples include: designs and patterns, formulas for drugs and foods, manufacturing methods, computer programs, customer lists, and so much more. This list is far from being exhaustive.

Protecting Your Trade Secret
As the owner of the trade secret, you owe a reasonable duty to safeguard the information. This can be as simple as placing employees on notice of the trade secret and its confidential nature, and then treating the trade secret like it is actually a secret.

Uniform Trade Secrets Act
California is one of several states that adopted the Uniform Trade Secrets Act, codified under California Civil Code sections 3426, et seq. Under the Civil Code, improper use of trade secrets is referred to as misappropriation, which includes: acquisition of a trade secret by another person, disclosure of the trade secret without consent, using improper means to obtain the trade secret, and stepping outside the scope of normal use of the trade secret. [Cal. Civ. Code § 3426.1.]

It is important to note that reverse engineering counts as an independent development, and therefore, does not constitute misappropriation.

But, Is It Criminal?
It can be. Trade secret owners have a multitude of civil and criminal options available to them when a trade secret is misappropriated.

Are you concerned about your trade secrets? Let Eskridge Law help you today.

Need more information?
ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net). Please visit our website at eskridge.hv-dev.com.

This article is based on the law as of the date posted at the top of the article. This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.