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  • Attorney Joe Culik

What is the Legal Standard for Theft of a Business’s Trade Secrets in North Carolina?

Companies in similar lines of business are often in fierce competition for customers and clients. Competition is usually good for the marketplace, but what happens if one of those companies goes too far and steals another’s trade secrets?

First, it helps to know what exactly trade secrets are. The North Carolina Legislature has passed a Trade Secrets Protection Act, which defines trade secrets as “business or technical information.


“Trade secret” means business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that:


  • Derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and

  • Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.


G.S. § 66-152. In short, trade secrets are proprietary information that have commercial value, and that a business uses reasonable efforts to keep secret.


The Trade Secrets Protection Act says that if another business “misappropriates” your trade secrets by acquiring or disclosing then without your permission, you can file a lawsuit for damages, and seek an injunction to stop the use of your trade secrets.


Furthermore, a recent decision from the North Carolina Business Court says that if you file a lawsuit for theft of trade secrets, you must be able to specifically allege what the trade secrets were and how they were misappropriated. This sounds like a simple task, but oftentimes the business whose trade secrets are stolen only vaguely knows what was stolen and how it was used. This decision places a further burden on the business that was stolen from, and may require some factual investigation before a lawsuit can be filed.


As the court explained, you must be able to “identify a trade secret with sufficient particularity so as to enable a defendant to delineate that which he is accused of misappropriating and a court to determine whether misappropriation has or is threatened to occur.”


If you are concerned that your business trade secrets were stolen or you need assistance seeking a remedy under the Trade Secrets Protection Act, gives us a call at 980-999-3557 to see how we can help.