MIAMI BUSINESS LITIGATION: TRADE SECRET MISAPPROPRIATION IMMUNITY

The federal trade secret statute offers trade secret owners broad protections protecting their trade secrets. A trade secret owner may prosecute a trade secret misappropriation lawsuit against another who intends to convert a trade secret forthe economic benefit of anyone other than the owner. The statute covers those that (1) steal or attempt to steal the trade secret information; (2) duplicate, copy, transmit, or attempt to duplicate, copy, or transmit to the trade secret information without authorization; (3) receive or attempt to receive the trade secret information knowing it was stolen or appropriated without authorization; and (4) conspire with another to commit the aforementioned acts. 18 U.S.C.A. § 1832. The statute therefore applies to those who steal the information, help steal the information, and receive the information. The Miami business litigation attorneys of the Mavrick Law Firm represent 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.

Although the federal trade secret statute covers a broad range of persons that could be involved in a scheme to steal another’s trade secrets, the statute contains several exceptions that provide immunity to certain persons that would otherwise satisfy the criteria of misappropriation. A civil cause of action for trade secret misappropriation cannot be prosecuted against an individual who directly or indirectly discloses the trade secret to a Federal, State, or local government official. 18 U.S.C.A. § 1833. A civil cause of action for trade secret misappropriation also cannot be prosecuted against an individual who discloses trade secret information to an attorney. However, in both cases, the disclosure must be made for the sole purpose of reporting or investigating a suspected violation of law.

In Hart v. Digitalzone Inc., the plaintiff argued the defendant misappropriated a trade secret database full of customer information and sales because the defendant acquired a database through improper means. 2025 WL 1927622 (D. Colo. May 30, 2025). The plaintiff contended that the defendant’s actions constituted misappropriation because his acquisition was not related to a legitimate business purpose. The plaintiff moved for summary judgment and submitted evidence demonstrating the defendant acquired the information because he “thought takin [the plaintiff]’s proprietary information could be of use to him” in a competing enterprise. The defendant opposed summary judgment by arguing his acquisition of the database was for the purpose of disclosing the sales information to his attorney so that his counsel could investigate a wage claim relating to unpaid sales commissions owed by the plaintiff to the defendant. The court denied the plaintiff’s summary judgment request because it could not indisputably prove the defendant took the database for his own purposes as opposed to helping his counsel investigate a potential wage claim.

Hart v. Digitalzone Inc., demonstrates a defendant can defend against a trade secret misappropriation claim by arguing he or she took the information for the sole purpose of providing that information to counsel in furtherance of an investigation. However, the credibility of that position will certainly be tested during the litigation process. The plaintiff will likely present as much evidence as possible to prove the defendant did not have an altruistic purpose, and instead, intended to profit or otherwise benefit from taking the information. Defendants should be prepared to prove otherwise.

The Miami business litigation lawyers of the Mavrick Law Firm also represent clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.