Wisconsin and federal law protect the owner of a trade secret from “misappropriation.”

First, what is misappropriation?  To misappropriate something is generally to take something dishonestly for your own use.

Second, and more importantly, if Wisconsin and federal law protect the owner of a trade secret from misappropriation, what does misappropriation of a trade secret mean under Wisconsin and federal law?

Under both Wisconsin and federal law, misappropriation of a trade secret includes acquiring the trade secret of another person when one knows or has reason to know that the trade secret was acquired by improper means.  Under federal law reverse engineering and independent derivation are not improper means to acquire a trade secret, but the following are improper means to acquire a trade secret: “theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.”

Under both Wisconsin and federal law, misappropriation of a trade secret also includes disclosure or use of a trade secret  of another without express or implied consent by a person who:

1. Derived it from or through a person who utilized improper means to acquire it.
2. Acquired it under circumstances giving rise to a duty to maintain its secrecy or limit its use.
3. Derived it from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use.
4. Acquired it by accident or mistake.  In order to be misappropriation of a trade secret under federal law for a trade secret acquired by accident or mistake, the person must have known or had reason to know that the trade secret was a trade secret.

In laymen’s terms, Wisconsin and federal trade secret law will protect the owner of a trade secret from the dishonest acquisition of the trade secret by another person.  The owner of a trade secret may be more likely to have protectable rights if individuals with access to the trade secret:

1. Have a duty to maintain its secrecy or limit its use.
2. Know or have reason to know that the trade secret is, in fact, a trade secret.

What steps has your company implemented to protect its trade secrets?  What steps has your company implemented to ensure that it may not be liable for misappropriation of a competitor’s trade secrets from new employees or independent contractors?

[Legal advice not only involves an understanding of the law, but the application of the law to a particular set of circumstances or facts.  Typically blog posts are imperfect tools to address the subtlety and exceptions of the law that may apply in particular situations.  As a result, the information in this blog post does not represent legal advice.  If you are in a situation where you need or desire legal advice, we would be happy to help.  Check out our Contact Us page, and feel free to set-up a no-charge initial consultation.]