Austin TX Business Law Blog

Thursday, May 28, 2015

Trade Secrets At Issue In New Lawsuit Involving Apple

How Can My Business Protect Our Trade Secrets?

Your trade secrets are protected by Texas common law and the state’s Uniform Trade Protection Act and they can be protected by a properly drafted non-disclosure agreement. Those agreements make it clear to an employee what can and cannot be disclosed both during and after the person’s employment. This agreement not to disclose is made in exchange for obtaining or maintaining the person’s job. 

Though there is no guaranty this agreement will not be broken, but if it is, you have legal recourse to enforce the contract and/or seek damages due to its breach. The trade secrets or intellectual property you may want to protect could be sales or marketing plans, employee contact information, customer contact lists, manufacturing processes or product formulas. 

A recent lawsuit filed by Massachusetts company A123 Systems, LLC (which makes lithium-ion batteries) demonstrates some of the issues that can accompany trade secret disputes. It claims that five former employees violated non-disclosure agreements because they either went to work for the computer company Apple, Inc., or planned to do so, and they were going to bring company trade secrets with them, according to Bloomberg. Apple is accused of aggressively hiring their employees, possibly as part of a reported effort to develop an electric car.

A123 became known in 2007 when General Motors Corp. (GM) worked with the company to come up with battery technology that could be used in its electric-plug-in hybrid car the Chevrolet Volt (GM later chose LG Chemical Ltd. to provide the batteries).

A123 is seeking a court order that would prohibit one of its former employees from breaching his employment agreement and prevent Apple from encouraging him to do so. The company also wants the court to order the return of any A123’s confidential documents that the defendants may have in their possession.

Every company has trade secrets that are vital to its ability to stay in business and grow in the future; they are worth taking steps to protect. The Kumar Law Firm in Austin can help you create non-disclosure agreements for your employees so you can protect your business. If you are interested in finding out how you can protect your companies trade secrets, call our business law attorneys today at (512)960-3808.

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