In the article, Millions evaporate as trade secrets lawsuits fly across NC, US, Triangle Business Journal’s Jennifer Henderson reported that the state is seeing a rise in trade secrets lawsuits – driven by numerous factors – and highlights why this is concerning news for businesses, particularly tech startups, life sciences and the entrepreneurial ecosystem in general.
Smith Anderson partner Zeb Anderson provided insight into trade secrets litigation and pointed out that when an employee leaves to join a competitor and takes company property, problems arise regardless of whether the employee took things “thoughtlessly” or “deliberately with bad intent.” Businesses, however, typically only initiate litigation when there is a serious concern about the trade secret thought to be misappropriated and the resulting competitive threat.
Zeb states “the technology that is getting developed in the Research Triangle Park involves the types of businesses that most likely have a need for trade secrets protection.” Given the number of technology startups and life sciences companies located in the area, the fact that trade secrets lawsuits are on the rise, raises a growing concern.
According to the article, the number of trade secrets lawsuits are on the rise due to recent law changes and how easy it is for employees to “steal” proprietary information. Data from Lex Machina, a California-based legal analytics firm, noted that there was an estimated 140 percent increase in the number of trade secrets lawsuits filed in N.C. between 2016 and 2017. Smith Anderson’s litigation experience is consistent with these statistics.
The article also explained that trade secrets lawsuits are a “risk worth avoiding,” given the high stakes involved, the litigation costs and the damage that can follow. Accordingly, businesses are well-advised to take steps up-front to protect their trade secrets and try to avoid litigation. “Trade secrets litigation can be expensive,” Zeb explained. At the same time, sometimes litigation is necessary, notwithstanding advance avoidance efforts, particularly when valuable intellectual property is at risk.
Zeb’s practice focuses on the representation of private and public employers in connection with all aspects of employment-related litigation. He has represented employers in state and federal courts, and before government agencies throughout North Carolina and in other jurisdictions across the country. His experience includes litigation involving employment-related statutory, as well as common law, claims arising under federal and state law and issues that arise when employees leave to join competitors, including non-compete and non-solicitation restrictions, trade secret misappropriation, tortious interference, and unfair competition.
Triangle Business Journal subscribers may read the full article here.