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Take a lesson from Uber: settle quickly in a trade secret case

On Behalf of | Jun 19, 2018 | Uncategorized

Stealing a company’s trade secrets is serious business, particularly in the modern landscape of constantly, emerging technologies. Uber paid about $245 million to settle with Waymo, a Google offshoot, just five days into a trade secret trial. The car service app was accused of stealing trade secret’s related to Waymo’s autonomous car sensors.


Trade Secret Defined

According to the U.S. Patent and Trademark Office, a trade secret can be any information used to gain an economic edge over your business competitors, including processes, techniques, devices, formula or even an arrangement of information. Some famous examples include the KFC chicken recipe or Google’s search algorithms.

The difference between trade secrets and other intellectual property is that trade secrets do not expire. That means if a company maintains its secrecy, a trade secret is protected potentially forever. An example of misappropriation is a former employee taking a trade secret to a rival company for use.

More federal cases and convictions

Before 2016, trade secret cases were addressed under state laws, but could be prosecuted federally if the case crossed state lines. However, in 2016, the federal government passed the Defend Trade Secrets Act, which allowed trade secret cases to be litigated at a federal level.

According to Fast Company, since this act passed, federal cases have increased from 860 in 2016 to 1,132 in 2017. That is an increase of over 30 percent in one year.

Federal trade secret cases are not only increasing, but companies accused of trade secret misappropriation, like Uber, are more likely to be found guilty. Fast Company states that in cases that go to trial, the court finds the accused party guilty in over 70 percent of trade secret cases.

When a company is found guilty of trade secret misappropriation, it may be forced to pay royalties, as well as damages, court fees, and even attorney costs. With such high stakes and the likelihood of conviction, it is no surprise many companies choose to settle out of court. It can potentially save a lot of money and time.


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