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Who can I protect my Trade Secrets?


Unlike other jurisdictions, New York has not adopted a Trade Secrets Statute or any version of the Uniform Trade Secrets Act (UTSA). However, the principles governing Trade Secrets protection have been developed by the New York courts through case law.

What are Trade Secrets? How are Trade Secrets defined in New York?

There is no legal definition for Trade Secrets in New York. However, in many decisions, courts have agreed to understand Trade Secrets like this: "...any formula, pattern, device, or compilation of information that is used in one's business and which gives one an opportunity to obtain an advantage over competitors who do not know or use it..."

What is it important to know about Trade Secrets protection?

The issues related to Trade Secrets usually arise in the context of Trade Secrets misappropriation. Basically, small businesses and entrepreneurs come to understand what trade secrets are when their proprietary information has been stolen or misused. It is important to understand what trade secrets are in advance because that is the best strategy to protect them. "Trade Secrets" is a very broad concept and can cover a diversity of strategic information.

What is Trade Secrets misappropriation?

Trade Secrets misappropriation is the unlawful use or disclosure of Trade Secrets. To prevail in a trade secrets misappropriation lawsuit, a plaintiff must establish that:

  • It possesses a trade secret.

  • The defendant used that trade secret in breach of an agreement, confidential relationship or duty, or as a result of discovery by improper means.

Considering that the concept of Trade Secrets is so broad, a plaintiff must demonstrate a Trade Secrets by offering evidence about the possession and ownership of strategic information that meets the common law definition of Trade Secrets. Moreover, a final determination of trade secrets is usually made by the court taking into account:

  • The extent to which the information is known outside the business of the plaintiff.

  • The extent to which the information is known by employees and others involved in the business.

  • The extent of measures taken by the plaintiff to guard the secrecy of the information.

  • The value of the information to the plaintiff's business and its competitors.

  • The amount of effort or money expended by the business in developing the information.

  • The ease or difficulty with which the information could be acquired or duplicated by others.

When can I sue for Trade Secrets misappropriation?

The statute of limitations for trade secret misappropriation claims, in New York, is three years based upon the limitation. This means that if a person or a company misappropriates and/or discloses a trade secret, the affected party has three years to file a lawsuit. The time for purposes of the statute of limitations is counted from the time that person becomes liable to the trade secret owner, upon disclosure or misappropriation. If the person keeps the secret confidential but makes use of it for her own commercial advantage, each successive use constitutes a new, actionable tort for purposes of the running of the statute of limitations.

What kind of remedies can I request regarding my Trade Secret Misappropriation Claim?

In New York, a plaintiff affected by the unlawful misappropriation of his trade secrets may request the court any of the following possible remedies: 

  • Injunctive relief.

  • Damages, including compensation for Plaintiff's loss, an accounting of Defendant's profits, or a reasonable royalty. Compensatory damages in a misappropriation claim must be measured by Plaintiff's actual losses and cannot be based on costs Defendant avoided by misappropriating the trade secret.

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