Traverse City trade secret attorneys Revision Legal, help businesses protect the information that gives them a edge over the competition. Trade secrets are an often-underutilized form of intellectual property. But when it’s at risk of being disclosed, the stakes couldn’t be higher.

Michigan Trade Secret Law

Picture this. A company has spent years analyzing its non-public customer data to create a a program, compilation, or formula that allows the company to find buying customers more often and service them at a lower price. However, a high-level executive has recently left to join a competing business. Can he take the company’s work with him? What would your company do?

Traditionally, businesses use confidentiality, non-competition, and non-solicitation agreements to protect their business assets. But the Michigan Uniform Trade Secrets Act (MUTSA) can also provide an avenue of relief. Specifically, the MUTSA gives businesses the option to stop, or prevent, the unauthorized use or disclosure of trade secrets.

How to Define a Trade Secret

Michigan law defines a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that is both of the following:

(i) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Although state law provides a definition, many trade secret cases turn on whether the information at issue actually represents a trade secret. For example, vendor lists, customer lists, and customer information may or may not be a protectable trade secret, depending on the facts of each case. For more information about how these groups of information can be protected as a trade secret, click here.

Trade Secret Litigation

Traverse City trade secret attorneys Revision Legal have prosecuted and defended trade secret cases. Whether your businesses need to prevent the disclosure of information, or you need to defend a claim for misappropriation of trade secrets, Revision Legal can help.

Contact Revision Legal today to schedule a consultation regarding your trade secret issue by completing the contact form on this page or by calling 231-714-0100.

Misappropriation of Trade Secrets: The Legal Standard

Under MCL 445.1902(b), misappropriation of a trade secret occurs when someone acquires a trade secret through improper means, or discloses or uses a trade secret without consent after acquiring it under circumstances creating a duty of secrecy. Improper means under Michigan law include theft, bribery, misrepresentation, breach of a duty to maintain secrecy, and industrial espionage. In practice, the vast majority of Traverse City trade secret cases involve a former employee or business partner who took confidential information when the relationship ended.

To prevail on a misappropriation claim in Michigan, a plaintiff must establish three elements: (1) the existence of a trade secret; (2) the defendant’s acquisition of the trade secret under circumstances giving rise to a duty of confidence; and (3) the defendant’s unauthorized use or disclosure of the trade secret. Courts undertake a detailed factual inquiry on each element, and trade secret litigation is inherently fact-intensive. The outcome often turns on the quality of the evidence — how the information was developed, how access was controlled, what agreements were in place, and exactly what the defendant did with the information.

Common Fact Patterns in Traverse City Trade Secret Cases

Revision Legal handles trade secret disputes arising in a variety of business contexts in Northern Michigan. The most common scenarios we encounter include:

• Departing employees — A key employee resigns and joins a direct competitor, bringing with them customer contact lists, pricing data, or proprietary processes that belong to the former employer. This is the single most common trade secret fact pattern and one where speed of response is critical.
• Business partner disputes — Two parties share confidential business information in the context of a potential joint venture, acquisition, or partnership. The relationship breaks down, and one party uses the disclosed information for their own benefit.
• Vendor or contractor misuse — A vendor or independent contractor with access to proprietary systems, formulas, or processes uses that information to compete with or undercut the business that shared it.
• Cyber theft — Employees or outsiders access computer systems without authorization and extract confidential business information. These cases often implicate both state trade secret law and the federal Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836.

The Defend Trade Secrets Act: Federal Protection

In 2016, Congress enacted the Defend Trade Secrets Act (DTSA), which for the first time created a federal civil cause of action for trade secret misappropriation. 18 U.S.C. § 1836. The DTSA does not preempt state law claims under the MUTSA — both can be pursued simultaneously. The DTSA uses a definition of trade secret substantially similar to the MUTSA’s, requiring that the owner have taken reasonable measures to keep the information secret and that the information derive independent economic value from its secrecy.

One significant advantage of the DTSA is its ex parte seizure provision. Under 18 U.S.C. § 1836(b)(2), a court may, in extraordinary circumstances, issue an order seizing property necessary to prevent the propagation or dissemination of the trade secret without prior notice to the defendant. This is an extraordinary remedy rarely granted, but it is available where, for example, a defendant has made clear an intent to immediately disclose or distribute misappropriated information. Revision Legal’s attorneys are experienced in both federal and state trade secret proceedings and can advise Traverse City businesses on which forum and which claims provide the best strategic position.

Remedies Available to Traverse City Businesses

When a trade secret has been misappropriated — or when misappropriation is threatened — the MUTSA and DTSA provide the following remedies:

• Injunctive relief — Courts may enter temporary restraining orders and preliminary and permanent injunctions to prevent actual or threatened misappropriation. MCL 445.1903; 18 U.S.C. § 1836(b)(3)(A). This is typically the first priority in an emergency trade secret situation.
• Actual damages and unjust enrichment — A plaintiff may recover both its actual losses and any unjust enrichment gained by the defendant that is not already captured in the actual loss calculation. MCL 445.1904.
• Exemplary damages — For willful and malicious misappropriation, courts may award up to twice the actual damages as exemplary damages. MCL 445.1904(2).
• Attorney’s fees — Reasonable attorney’s fees may be awarded in cases of willful misappropriation or bad-faith claims. MCL 445.1905.

Protecting Your Traverse City Business Before a Dispute Arises

The time to protect your trade secrets is before they are stolen. Businesses with strong trade secret protection programs are better positioned both to prevent misappropriation and to succeed in litigation if it occurs. Revision Legal advises Traverse City-area businesses on practical protective measures including:

• Auditing which business information qualifies as a trade secret and documenting the analysis;
• Restricting access to confidential information on a need-to-know basis and maintaining logs of who accesses what;
• Requiring employees, contractors, and business partners to sign robust non-disclosure agreements before accessing confidential information;
• Including enforceable confidentiality provisions in employment agreements, with clear post-termination obligations;
• Implementing IT security measures — encryption, access controls, activity monitoring — that demonstrate ongoing effort to maintain secrecy; and
• Conducting thorough employee exit procedures, including reminders of confidentiality obligations and retrieval of all company property.

Revision Legal’s Traverse City trade secret attorneys represent both plaintiffs seeking to protect their business information and defendants facing trade secret claims. If your business is at risk — or if you have been served with a trade secret complaint — contact us immediately. Call 231-421-6108 or complete the contact form on this page for a confidential consultation.