Modern building.Modern office building with facade of glass
Representing Businesses and Business Owners Contact Us Now!

Articles Posted in Trade Secrets

Published on:

Trade secret misappropriation claims are commonly filed in business litigation by employers against former employees. An employee is precluded from using for his or her own advantage, and to the detriment of a former employer, any trade secrets obtained in the course of prior employment. East v. Aqua Gaming, Inc., 805 So. 2d 932 (Fla. 2d DCA 2001). Where an employee acquires, during the course of his or her employment, a special technique or process developed by his or her employer, the employer is under a duty, even in the absence of an express contractual provision, not to disclose such skills, techniques, or processes for the employee’s own benefit or another’s benefit to the detriment of the former employer. Premier Lab Supply, Inc. v. Chemplex Industries, Inc., 10 So. 3d 202 (Fla. 4th DCA 2009). Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

In cases where there is no restrictive covenant between an employer and its employees, employers can sometimes prohibit former employees from disclosing confidential information under the Florida Uniform Trade Secrets Act (“FUTSA”). The lack of a confidentiality agreement does not necessarily defeat an employer’s argument that particular information is trade secret. Premier Lab Supply, Inc. v. Chemplex Industries, Inc., 10 So. 3d 202 (Fla. 4th DCA 2009). FUTSA mirrors the federal Uniform Trade Secrets Act, which also prohibits misappropriation of trade secrets and provides certain remedies. To obtain relief under FUTSA, the employer must prove: “(1) that it possessed a trade secret and took reasonable steps to protect its secrecy; and (2) the trade secret was misappropriated, either by one who knew or had reason to know the trade secret was improperly obtained or who used improper means to obtain it.” Mapei Corp. v. J.M. Field Marketing, Inc., 295 So. 3d 1193 (Fla. 4th DCA 2020).

Under FUTSA, “trade secret” is defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process that: (a) 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; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” § 688.002, Fla. Stat. To be a trade secret under FUTSA, the information sought to be protected must be secret, and information that is generally known, or is necessarily disclosed upon use by a third party, cannot qualify as a trade secret. In re Maxxim Med. Group, Inc., 434 B.R. 660 (Bankr. M.D. Fla. 2010).

Published on:

Business litigation in Florida often involves claims for trade secret misappropriation under Florida’s Uniform Trade Secret Act (“FUTSA”) or the Defend Trade Secrets Act (“DTSA”). In business litigation, a business’ customer list may qualify for trade secret protection if the list is misappropriated through improper means. may occur during the employment or after an employees’ employment terminates. For liability to attach under DTSA or FUTSA, the trade secret information must be the fruit of a wrongful acquisition or misappropriation. Misappropriation of a trade secret occurs where a person who knows or has reason to know that the trade secret was acquired by improper means acquires the trade secret of another or where a person who has obtained the trade secret by improper means discloses or uses the trade secret of another without express or implied consent.” ACR Elecs., Inc. v. DME Corp., 2012 WL 13005955 (S.D. Fla. Oct. 31, 2012). Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

A plaintiff bringing a claim under the DTSA must plausibly allege that it (i) “possessed information of independent economic value” that (a) “was lawfully owned by” the plaintiff and (b) for which the plaintiff “took reasonable measures to keep secret,” and (ii) the defendant “used and/or disclosed that information,” despite (iii) “a duty to maintain its secrecy.” Trinity Graphic, USA, Inc. v. Tervis Tumbler Co., 320 F.Supp.3d 1285 (M.D. Fla. 2018).

Similarly, FUTSA provides a cause of action for the misappropriation of trade secrets. Fla. Stat. § 688.001-09. “To prevail on a FUTSA claim, a plaintiff must demonstrate that (1) it possessed a ‘trade secret’ and (2) the secret was misappropriated.” Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 898 F.3d 1279 (11th Cir. 2018). Under FUTSA, a “trade secret” is:

Published on:

A prevalent issue arising in business litigation throughout Florida is whether the customer list of a business or employer is a protected trade secret under Fl as a trade secret Florida’s Uniform Trade Secret Act (FUTSA). Trade secrets are broadly defined under FUTSA and include information that “derive[s] economic value from not being readily ascertainable by others and must be the subject of reasonable efforts to protect its secrecy.” Del Monte Fresh Produce Co. v. Dole Foods Co., Inc., 136 F. Supp. 2d 1271 (S.D. Fla. 2001). Florida law considers a business’s customer lists and the information contained therein to be trade secrets subject to protection. Variable Annuity Life Ins. Co. v. Dull, No. 09-80113, 2009 WL 3180498 (S.D. Fla. Sept. 25, 2009). Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

FUTSA provides that “a complainant is entitled to recover damages for misappropriation.” Fla. Stat. § 688.004(1). In turn, “misappropriation” is defined as either the “(a) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means, or (b) Disclosure or use of a trade secret of another . . .” Fla. Stat. § 688.002(2) (emphasis added). Thus, a plain reading of the statute makes clear that the wrongful acquisition of a trade secret, even without its actual use, constitutes a violation of FUTSA. See H2Ocean v. Schmitt, 2006 WL 1835974 (N.D. Fla. June 30, 2006). A trade secret is misappropriated if it is either acquired via improper means, or if it is disclosed or used by someone without proper consent.

FUTSA permits injunctive relief to redress any actual or threatened misappropriation of trade secrets. Se. Mech. Servs., Inc. v. Brody, 2008 WL 4613046 (M.D. Fla. Oct. 15, 2008). Florida law protects customer lists from misappropriation through injunctive relief. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Silcox, No. 01- 8800, 2001 WL 1200656 (S.D. Fla. Oct. 4, 2001). To prove a violation of FUTSA, a plaintiff must show that it: (1) possessed secret information and took reasonable steps to protect its secrecy and (2) the secret it possessed was misappropriated, either by one who knew or had reason to know that the secret was improperly obtained or by one who used improper means to obtain it. Del Monte Fresh Produce Co. v. Dole Foods Co., Inc., 136 F. Supp. 2d 1271 (S.D. Fla. 2001). Florida courts have held that “documents containing strategic marketing plans and pricing information have been held to constitute trade secrets under Florida law.” VAES Aero Servs. v. Arroyo, 860 F. Supp. 2d 1349, 1359 (S.D. Fla. 2012).

Published on:

In business litigation, claims for trade secret misappropriation often arise under Florida’s Uniform Trade Secret Act (“FUTSA”) or the Defend Trade Secrets Act (“DTSA”). For liability to attach under the DTSA and FUTSA, the information must be the fruit of wrongful acquisition, or misappropriation. The DTSA defines “misappropriation” to include “acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means” or “disclosure or use of a trade secret of another without express or implied consent” in specified circumstances. 18 U.S.C. § 1839(5). “Improper means” under the DTSA includes “theft, bribery, misrepresentation, [and] breach or inducement of a breach of a duty to maintain secrecy,” but excludes “reverse engineering, independent derivation, or any other lawful means of acquisition.” Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Florida courts routinely find that trade secrets are acquired through improper means when a business’ employee copies or extracts electronic information before their employment ends. For example, in Pharmerica, Inc. v. Arledge, the United States District Court for the Middle District of Florida held that the defendant “misappropriated those trade secrets by duplicating and copying them and/or sending them to his home computer or personal email account and deleting them from the [plaintiff’s] computers.” 2007 WL 865510 (M.D. Fla. Mar. 21, 2007). Pharmerica considered the fact that the defendant “copied almost all of his electronic files from his work computer” just two days before he resigned from his position with his former employer. The trade secrets and proprietary information involved the former employer’s distribution and operational plans, quality control programs, and—most importantly—the former employer’s pricing details for major corporate clients that represented at one-third of the company’s total revenues.

Under the DTSA, federal courts across the United States have held that misappropriation by acquisition via download or password protected database requires evidence that an employee took affirmative action to ensure they retained access to the information after he or she was terminated, such as copying the information to his or her hard drive. For example, in Samick Music Corp. v. Gordon, the Court held it was reasonable to suspect that defendants obtained the customer’s information from the former employer’s database through improper means because: (a) many of the purchases were made by individuals who had previously purchased products from the former employer, and (b) the plaintiff identified two instances after the employee’s termination where defendants contacted former customers to sell them purported former employer’s replacement parts.  The district court found that Plaintiff had demonstrated a likelihood of success on its DTSA and CUTSA trade secret misappropriation claims. 2020 WL 3210613 (C.D. Cal. Mar. 26, 2020).

Published on:

Businesses can use non-compete agreements to protect their substantial business relationships with prospective and current customers, patients, or clients. A common issue in business litigation seeking to enforce non-compete agreements is whether a business has a trade secret that qualifies as a legitimate business interest. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

A non-compete agreement cannot be enforced without a court finding that the agreement is supported by a “legitimate business interest” in the non-compete agreement. “Section 542.335 contains a comprehensive framework for analyzing, evaluating and enforcing restrictive covenants in Florida based on an ‘unfair competition’ analysis.” Henao v. Prof’l Shoe Repair, Inc., 929 So. 2d 723 (Fla. 5th DCA 2006). Under Section 542.335, a plaintiff must satify three requirements to enforce a restrictive covenant: (1) the restrictive covenant must be “set forth in writing signed by the person against whom enforcement is sought”; (2) the party seeking to enforce the restrictive covenant “shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant”; and (3) the party seeking to enforce the restrictive covenant “shall plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction.” Section 542.335, Florida Statutes.

A business’ trade secret can qualify as a legitimate business interest pursuant to Florida law.  Trade secrets are specifically delineated as legitimate business interests in Section 542.335(1)(b)(1), Florida Statutes. The Florida Uniform Trade Secrets Act (“FUTSA”) defines trade secrets as “information, including a formula, pattern, compilation, program, device, method, technique, or process” that:

Published on:

Business litigation often involve claims for trade secret misappropriation under Florida’s Uniform Trade Secret Act (FUTSA). Under certain circumstances, parties in business litigation may be entitled injunctive relief under FUTSA. A plaintiff seeking a temporary injunction to protect its trade secrets must show that there is an actual or likely misappropriation of trade secrets and that the circumstances justify the entry of a temporary injunction. To prevail on a motion for a preliminary or temporary injunction, a plaintiff must show that “(1) irreparable harm will result if the temporary injunction is not entered; (2) an adequate remedy at law is unavailable; (3) there is a substantial likelihood of success on the merits; and (4) entry of the temporary injunction will serve the public interest.” Donoho v. Allen-Rosner, 254 So. 3d 472 (Fla. 4th DCA 2018). Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

A plaintiff seeking an injunction must establish that it “(1) that it possessed a trade secret and took reasonable steps to protect its secrecy; and (2) the trade secret was misappropriated, either by one who knew or had reason to know the trade secret was improperly obtained or who used improper means to obtain it.” Mapei Corp. v. J.M. Field Mktg., Inc, 295 So. 3d 1193 (Fla. 4th DCA 2020). Under Florida law, misappropriation of a trade secret occurs “where a person who knows or has reason to know that the trade secret was acquired by improper means acquires the trade secret of another or where a person who has obtained the trade secret by improper means discloses or uses the trade secret of another without express or implied consent.” ACR Elecs., Inc. v. DME Corp., 2012 WL 13005955 (S.D. Fla. Oct. 31, 2012).

In addition, “the information that the plaintiff seeks to protect must derive economic value from not being readily ascertainable by others and must be the subject of reasonable efforts to protect its secrecy. Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 136 F. Supp. 2d 1271 (S.D. Fla. 2001). If the subject information is already known or readily accessible to the public, it typically does not qualify for trade secret protection. Am. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407 (11th Cir.1998). “[S]omething that is already readily ascertainable can[not] be misappropriated.” Wound Care Concepts, Inc. v. Vohra Health Services, P.A., 2022 WL 320952 (S.D. Fla. Jan. 28, 2022).

Published on:

Business litigation in Florida often involves claims for trade secret misappropriation under Florida’s Uniform Trade Secret Act (FUTSA) or the Defend Trade Secrets Act (DTSA). For liability to attach under DTSA or FUTSA, the trade secret information must be the fruit of a wrongful acquisition or misappropriation. Misappropriation of a trade secret occurs “where a person who knows or has reason to know that the trade secret was acquired by improper means acquires the trade secret of another or where a person who has obtained the trade secret by improper means discloses or uses the trade secret of another without express or implied consent.” ACR Elecs., Inc. v. DME Corp., 2012 WL 13005955 (S.D. Fla. Oct. 31, 2012). In business litigation involving an employment relationship, misappropriation may occur during the employment or after an employees’ employment terminates. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The DTSA defines “misappropriation” to include “acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means” or “disclosure or use of a trade secret of another without express or implied consent” in specified circumstances. 18 U.S.C. § 1839(5). “Improper means” under DTSA includes “theft, bribery, misrepresentation, [and] breach or inducement of a breach of a duty to maintain secrecy,” but excludes “reverse engineering, independent derivation, or any other lawful means of acquisition.” 18 U.S.C. § 1839(6). Meanwhile, the definition of “improper means” under FUTSA also includes “breach or inducement of a breach of a duty to maintain secrecy.” Fla. Stat. § 688.002(1). While the general definitions of a trade secret are identical under FUTSA and DTSA, a court’s analysis under each statute is substantially equivalent. Compulife Software Inc. v. Newman, 959 F.3d 1288 (11th Cir. 2020). Actions may be “improper” for trade-secret purposes even if not independently unlawful. Compulife Software Inc. v. Newman, 959 F.3d 1288 (11th Cir. 2020).

Florida courts routinely find that trade secrets may be acquired through improper means after an employment relationship ends. Federal courts within the Eleventh Circuit Court of Appeals must review the facts surrounding the alleged misappropriation on a case-by-case basis. For example, in Int’l Hair & Beauty Sys., LLC v. Simply Organic, Inc., the United States District Court in and for the Middle District of Florida granted plaintiff’s motion for preliminary injunction against the business’ former technical director for misappropriation of company trade secrets and to enforce non-compete and non-solicitation agreements. 2011 WL 5360098 (M.D. Fla. Sep. 26, 2011). During his employment, the Simply Organic defendant “had access to contact management lists including clients, customers and potential customers” of plaintiff’s hair salon. Months after his employment ended, the former employee then obtained, from another former employee of plaintiff, “a list of hair salons and beauty supply stores” that contained several “salons that were utilizing products of Plaintiff.”

Published on:

Trade secret claims in business litigation require courts to determine whether a business adequately protects its alleged trade secrets by preventing disclosure to unauthorized third parties. To qualify for protection under Florida Uniform Trade Secrets Act (“FUTSA”) and the federal Defend Trade Secrets Act (“DTSA”), a business therefore must show that it adequately maintained the secrecy of its trade secrets and confidential information. For this reason, courts often will not protect an alleged trade secret if the subject information is disclosed to other parties who do not have an obligation to keep the information confidential. Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

“In a trade secret action, the plaintiff bears the burden of demonstrating both that the specific information it seeks to protect is secret and that it has taken reasonable steps to protect this secrecy.” Am. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407 (11th Cir.1998). Disclosing the “information to others who are under no obligation to protect the confidentiality of the information defeats any claim that the information is a trade secret.” In re Maxxim Med. Grp., Inc., 434 B.R. 660 (Bankr. M.D. Fla. 2010).

If the party receiving confidential, trade secret information has a legal obligation to maintain secrecy of the information, then disclosure to such parties does not automatically destroy the secrecy element required under FUTSA or DTSA. This remains true even if the disclosing party and the receiving party do not have a confidentiality agreement between them. For example, in XTec, Inc. v. Hembree Consulting Services, Inc., the United States District Court for the Southern District of Florida found that disclosure of confidential information to the government did not necessarily defeat the requirement of secrecy for trade secret protection, because 48 C.F.R. § 27.402 “obligates the government to maintain the secrecy of proprietary data; thus, in this case, there was an accompanying mechanism to maintain [plaintiff’s] secrecy.” 183 F. Supp. 3d 1245 (S.D. Fla. 2016).

Published on:

In business litigation, Florida courts require plaintiffs to describe their alleged trade secret with a certain degree of particularity. Failing to do that can be fatal to trade secret claims. A plaintiff does not only have to prove that certain confidential information was misappropriated, but it must also prove that the misappropriated information actually qualifies as a trade secret under Florida or federal law. To establish its claim for trade secret misappropriation, the party must adequately explain what information qualifies as trade secret and why the alleged confidential information’s secrecy makes the trade secret valuable to a business. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Florida’s Uniform Trade Secret Act (FUTSA) defines a trade secret as as “information, including a formula, pattern, compilation, program, device, method, technique, or process that [d]erives 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; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Section 688.002(4), Florida Statutes. Misappropriation under FUTSA also includes circumstances when a party simply possesses the trade secret material. Section 688.002(2), Florida Statutes.

Business litigation plaintiffs asserting trade secret misappropriation claims must show that what was taken is valuable because it is secret. Plaintiffs are also required to show that they acted reasonably when trying to keep its information secret. Trade secret misappropriation claims inherently fail when the litigants do not demonstrate that the allegedly misappropriated information qualifies as a trade secret.  “In order to ascertain whether trade secrets exist, the information at issue must be disclosed.”  Lovell Farms, Inc. v. Levy, 641 So. 2d 103 (Fla. 3d DCA 1994). “The plaintiff must, as a threshold matter, establish that the trade secret exists. To do so, it must disclose the information at issue.” Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So. 3d 678 (Fla. 2d DCA 2010).

Published on:

Trade secret claims often arise in business litigation under federal and state law. The Defend Trade Secrets Act (DTSA) provides parties with opportunities to pursue trade secret misappropriation claims in a federal forum. Florida’s Uniform Trade Secret Act (FUTSA) is substantially similar to DTSA and specifically recognizes that it “shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it.” Section 688.009, Florida Statutes. Trade secret law is generally uniform between states. Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

DTSA defines a “trade secret” as information which “the owner thereof has taken reasonable measures to keep such information secret; and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information”). By comparison, FUTSA§ 688.002 (4), Florida Statutes (defining “trade secret” as information which [d]erives 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; and [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy”).

Federal courts in Florida will generally interpret these substantive provisions in the same way. M.C. Dean, Inc. v. City of Miami Beach, Florida, 199 F. Supp. 3d 1349 (S.D. Fla. 2016). The similarity between FUTSA and DTSA provides Florida business litigation plaintiffs with flexibility in terms of their forum.  Unlike trade secret claims under state laws like FUTSA, claims under DTSA may be brought in federal court as a “federal question.”

Contact Information