It is crucial to understand that just as they do with independent contractors, employers within the life sciences industry engage in the common practice of using trainees, volunteers, and interns as a way of supplementing the workforce. Accordingly, in order to avoid potential liability for overtime payments and unpaid wages, it is crucial to ensure that these individuals have been appropriately classified.
As a continuation of our discussion, this blog post offers an overview of issues employers within the life sciences industry should consider when dealing with trainees, volunteers, and interns.
Trade Secret Protection & Restrictive Covenants in Life Sciences
The life sciences industry is highly interconnected and, therefore, fosters outsourcing arrangements, joint ventures, and collaborations between facilities and organizations, which, consequently, imply that employees are in constant mobility. Accordingly, these organizations and companies must understand how to defend against trade secret theft claims and take the necessary precautions to protect their confidential information and trade secrets. For instance, this is particularly crucial to employers in fields like testing services, which are characterized by the less common use of patent protection.
The Defend Trade Secrets Act (DTSA)
Pursuant to 18 U.S.C. §§ 1831–1839, trade secret misappropriation victims are permitted by the Defend Trade Secrets Act to bring actions in federal court, provided that the trade secret(s) in question are intended for use or are used in interstate commerce. Based on the UTSA (Uniform Trade Secrets Act), which is discussed below, the definitions of “misappropriation” or “trade secret” are not changed under the DTSA. Furthermore, another remedy provided under the DTSA, probably the best case scenario under state law, which is preferable to a preliminary injunction, is civil forfeiture.
Usually, it is understood that a defendant has already exploited a stolen trade secret by the time a preliminary injunction is awarded by a court. Notably, by permitting the seizure of the stolen assets by law enforcement, these situations are amicably addressed by the provisions of civil forfeiture under the DTSA. Thus, whenever planning to bring a lawsuit with the aim of recovering a stolen trade secret, it is critical to evaluate and determine whether the DTSA is the best option or not.
The Uniform Trade Secrets Act of 1979 (UTSA)
As mentioned in our past blog posts, the majority of U.S. states have adopted and enacted some form of the UTSA. Under this statute, a “trade secret” is defined, pursuant to UTSA § 1(4), as information that includes a process, technique, method, device, program, compilation, pattern, or formula that:
- Is, under the circumstances, subject to reasonable efforts aimed at maintaining its secrecy-and-
- Derives potential or actual independent economic value from not being readily ascertainable by proper means by or from not being generally known to other persons who can obtain economic value if it is disclosed and used.
It is crucial to understand that the first element of this definition of most significant. This is because even if the second element of the definition is met, there can be dire consequences if reasonable efforts and measures are not taken to protect secrecy. In fact, if no such reasonable efforts and measures were taken by the plaintiff to protect the information in question, courts do not hesitate to deny or dismiss the application for preliminary injunctions in claims related to theft or misappropriation of trade secrets.
In Part XII of this series and our blog post titled “Protecting & Maintaining Secrecy of Trade Secrets; Best Practices,” we shall move the discussion forward by hammering on some of the best practices for protecting and maintaining the secrecy of trade secrets in the life sciences industry.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer, Author, & Publisher.