The Big Oops: Planning for Inadvertent Disclosures of Trade Secrets

According to estimates, in 2018 the average business user sent and received 140 emails per day, a figure that is projected to grow significantly in coming years. On top of that, more business e-mail is done on mobile devices, which unfortunately means less attention to detail. As a result, we have seen increased incidence of company employees inadvertently sending sensitive corporate information to unintended recipients. And the risk emanates not only from your company's employees, but also the employees of any vendors who have access to your trade secrets. Fortunately, inadvertent disclosure of a trade secret does not mean that all is lost, provided that prompt and definitive action is taken.

Putting the Horse Back in the Barn

When it comes to the inadvertent disclosure of trade secrets, it can be possible to “put the horse back in the barn,” but notice of the disclosure must be given to the unintended recipient as soon as possible. Both the Uniform Trade Secret Act and the federal Defend Trade Secrets Act impose liability on those who use or disclose a trade secret with actual or constructive knowledge that it was “acquired by accident or mistake,” provided that such knowledge arose “before a material change of … position” by that person. Put another way, if the unintended recipient of a trade secret uses or discloses it without actual or constructive knowledge, no liability will exist. As a result, it is imperative that notice be given to the recipient promptly after learning of the inadvertent disclosure. Doing so will both 1) impose liability on the inadvertent recipient if they make use of disclosure, and 2) increase the odds that trade secret status is not lost. See e.g. Ideal Aerosmith, Inc. v. Acutronic USA, Inc., 2007 WL 4394447 at *8 (E.D.Pa. Dec. 13, 2007) (permitting trade secret claim to proceed against defendant that acquired trade secrets by mistake); Fireworks Spectacular, Inc. v. Premier Pyrotechnics, Inc., 107 F. Supp. 2d 1307, 1310–11 (D. Kan. 2000) (holding that trade secret status was not lost where recipients of inadvertent disclosure were given prompt notice).