Trade secrets are a form of intellectual property protected by state law. Traverse City trade secret lawyers Revision Legal provide representation to businesses and individuals in intellectual property disputes, including trade secret litigation.

Uniform Trade Secrets Act

Michigan has adopted the Michigan Uniform Trade Secrets Act, which provides businesses an avenue to both stop and prevent the disclosure and use of business information.

The first step in pursuing, or defending, a trade secret action is determining whether the information at issues actually constitutes a protectable trade secret. Not all information rises to the level of a trade secret.

So, what is a trade secret? Michigan law provides a statutory definition at MCL 445.1902. In general, however, a trade secret is a form of information, put into a formula, pattern, compilation, or program that 1) is actively kept secret and 2) derives value from its secrecy.

Vendor lists, customer information, and customer lists could reach the level of a trade secret, but only under certain situations, explained more here.

Business should be aware that their actions can have a direct impact on whether certain information can be classified as a trade secret. For example, information that is shared on websites, marketing materials, including trade show conventions, will not be considered a secret, and in return, will not be protected.

In general, information that is readily available to the public will not be considered for protection under Michigan law. Business should be aware of this reality and adjust their marketing plans and edit their websites as appropriate.

Protecting Trade Secrets

Traverse City trade secret lawyers Revision Legal advises businesses on how to proactively protect vital business information. Further, our intellectual property attorneys represent businesses and individuals in trade secret litigation.

To consult with our Traverse City trade secret lawyers, complete the contact form on this page, call 231-714-0100, or click here. 

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.