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Trade Secrets Part 2: A Colorado Trade Secret Owner's Bill of Rights

Mar 24, 2014

By Reed Morris

The most common scenario we see with trade secrets at Mallon & Lonnquist is where a former employee has left a company and is disclosing trade secret information to a new employer and competitor. The second most common trade secret scenario we see are employees who are contemplating leaving their current employer and evaluating any restrictions on their starting a new venture given their current employer’s confidentiality, non-disclosure and other non-compete agreements.  We begin our review under either scenario with the following two fundamental rights of Colorado Trade Secret Owners:

1) The right to prevent unauthorized disclosure of trade secrets.

2) The right to prevent unauthorized use of trade secrets.

Against whom can these rights be asserted? 

The targets of a trade secret owner asserting their rights are often close (or former) business colleagues, partners, joint-venturers or employees with which the owner originally disclosed the trade secrets in order to unlock their commercial value.  The relationships within this close business circles are often first established in the contracts between the parties such as employment, confidentiality, non-disclosure, and certain types of noncompete agreements [link]. 

A party in that has come into the possession of a Colorado trade secret can also be prevented from unauthorized disclosure. A typical example of a third-party targeted to prevent the use or disclosure of a trade secret is a new company started by a former employee. Under certain circumstances, the Colorado trade secret owner maintains its trade secret rights against such third parties even if there is no direct confidentiality agreement with them. The trade secret owner’s rights in these cases are by virtue of their coming into possession of the trade secret with knowledge that it belongs to the owner. 

Exploring the full scope of the Colorado trade secrets owner's rights to prevent disclosure and unauthorized use begins with an in-depth look at the actual trade secret, its protections, and evidence of the unauthorized disclosure.  We begin all cases with a look at these two basic rights and employ tools including litigation to enforce or define the scope of these rights when necessary.

Previous Post: What is a trade secret under Colorado law?

Mallon & Lonnquist, LLC, is a business and real estate law firm. Reed F. Morris is a Colorado a litigation attorney with Mallon & Lonnquist, based in Denver, Colorado. Reed regularly represents businesses and individuals in transactions in and commercial disputes and can be reached at rmorris@mallon-lonnquist.com.



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