Question

Don, an employee of Justad Company, agreed to become a “consultant” for a competitor’s company (Staton Company) owned by the White’s. Over the course of seven years, Don supplied the White's with confidential reports from his employer (Justad Company) and the White’s paid Don approximately $20,000 annually. Eventually, Don was caught and agreed to work with the FBI which led to the arrest of the White’s. When the Whites were charged with attempted theft of trade secrets they argued that it was impossible for them to have committed this crime because the documents were not actually traded secrets.

Does the government need to prove that the reports Don gave to the White’s qualified as trade secrets? What does the government need to establish in this case? Should the White’s be acquitted? Why or why not?

Answer 1

This is generally a case of trade secret misappropriation as because there was a leakage of trade secrets by the employee of the company which the employee had breached his duty of care and forwarded to a third party.

Thus in a case of misappropriation of trade secret the plaintiff that means here the government has a burden to prove that those were trade secrets.

There are three things that need to b established in this case. Firstly, there was some valuable information which needed to be concealed and kept as a trade secret, Secondly, the information is of such a nature that it is generally not known to the public and thirdly, those trade secrets were used by the defendant, in this case the Whites.

The White's should not be acquitted as there was misappropriation of trade secrets rightly as all the three conditions are satisfied. Firstly, it was a confidential document thus needed to be kept as a secret, secondly a confidential document needs to be kept a secret thus it is clear that it cannot be known to the public. Thirdly those secrets were used by the whites as they paid a regular salary to Don for a period of seven years. Of course the documents were of some use to the White's.

Thus the White's deserve to be penalized.