Intangible assets are typically the most valuable possession of a closely held business, but often are poorly protected. Risk mitigation through a business bulletproofing process can protect those assets from being misappropriated. Intangible assets include customer relationships and intellectual property. I sometimes ask closely held business owners if they lock…
Arbitration agreements survive the termination of an underlying contract, unless the parties specifically terminate the arbitrate provision. In disputes involving closely held businesses, the arbitration agreement may be invoked even if the business is no longer in existence. Unless there is a specific agreement on the question of ‘arbitrability’ of…
A court may immecdiately grant the plaintiff a restraining order or preliminary injunction when there is a valid trade secret claim and the plaintiff may suffer irreparable harm without it. Courts make the determination whether an injunction is necessary based on the evidence presented by the plaintiff at an initial…
Statutes that protect the rights of the owners of trade secrets protect against ‘misappropriation’ of confidential information, which requires a defendant to take or use the trade secret without permission. The inevitable disclosure doctrine can prevent an employee from working for another when the new job would inevitably require the…
The touchstone of a trade secret is that it provides the owner of the information with a competitive advantage in their market. Courts look at the cost of development, the difficulty in duplicating and measurable benefits to ascertain whether a bona fide trade secret exists. The first step in the…
To enforce a claim for misappropriation of a trade secret, the plaintiff must prove that the information was secret and valuable. Plaintiffs in New Jersey can rely on either the common law or the New Jersey Trade Secrets Act. Secrets that have been publicly disclosed lose their their protection as…
A former employee will violate the computer fraud and abuse act only by having unauthorized access to data, not by using data for an unauthorized purpose. Former owners or employees that access computer systems after termination may be liable under the Computer Fraud and Abuse Act. A federal claim based…
An executive with national responsibilities may be subjected to a broad geographic restriction in an employment restrictive covenant. Courts can and will enjoin a former executive from working for a competitor to prevent irreparable harm to the executive’s former employer when the restriction is reasonable. Misappropriation and use of a…