What is an example of a trade secret violation?

Asked by: Dr. Collin McLaughlin  |  Last update: February 18, 2026
Score: 4.8/5 (61 votes)

An example of a trade secret violation (misappropriation) is a former employee emailing themselves a client list and confidential pricing data before joining a competitor, then using that data to poach clients, which breaches their duty of confidentiality and the company's security measures. Violations involve improperly acquiring, disclosing, or using secret information, often through theft, hacking, bribery, or breaking an NDA, giving an unfair business advantage.

What are common trade secret violations?

Breaches of non-disclosure agreements, industrial espionage, theft, fraud, and bribery are all improper means of acquiring a trade secret. For example, if you hack into a company's computer and copy the files, this act of acquiring the secrets improperly is misappropriation.

What are some examples of trade secrets?

Examples of famous trade secrets

Coca-Cola: The formula of Coca- Cola's natural flavorings is a trade secret, although other ingredients are listed on the side of the bottle or can. Kentucky Fried Chicken: The KFC Original Recipe is a secret mix of ingredients (“11 herbs and spices”), created by Colonel Harlan Sanders.

What is an example of theft of trade secrets?

A classic example is the guarded recipe for Coca-Cola, one of the most renowned trade secrets. Someone using confidential business information without permission is stealing a trade secret.

How to prove misappropriation of trade secrets?

One way of showing misappropriation is by showing that an acquirer knew or had reason to know that the trade secret was acquired by improper means but the trade secret is acquired or retained. Disclosure or Use of Trade Secret as Misuse.

Misappropriation of Trade Secrets

38 related questions found

What is the burden of proof for trade secret misappropriation?

A person, business, or organization claiming trade secret misappropriation has the burden of proving not only that the alleged acts occurred, but also that the information in question meets the legal definition of a trade secret.

What is the hardest thing to prove in court?

The hardest things to prove in court involve intent, causation (especially in medical cases where multiple factors exist), proving insanity, and overcoming the lack of physical evidence or uncooperative victims, often seen in sexual assault or domestic violence cases. Proving another person's mental state or linking a specific harm directly to negligence, rather than underlying conditions, requires strong expert testimony and overcoming common doubts. 

What is the penalty for violating trade secrets?

A violation of Section 1832 is a serious criminal offense carrying stiff penalties. Anyone who steals trade secrets, or receives stolen trade secrets knowing that they were unlawfully obtained, can be punished by a maximum of 10 years in federal prison plus fines. The fines applicable under this section can be severe.

What are some famous trade secret cases?

What Are Some of the Most Famous Trade Secrets in Business History?

  • Introduction. ...
  • Coca-Cola's Secret Recipe. ...
  • Google's Algorithm. ...
  • Kentucky Fried Chicken's Recipe. ...
  • Apple's Product Design. ...
  • WD-40's Formula. ...
  • Coca-Cola's Marketing Strategy. ...
  • IBM's Corporate Culture.

Can you be sued for trade secrets?

If an employer has evidence that an employee misappropriated or used its trade secrets, it may opt to bring a claim under the Defend Trade Secrets Act (DTSA) in federal court and join state law claims in the federal action under the court's supplemental jurisdiction.

How to prove something is a trade secret?

Elements of a Trade Secret Claim

  1. The claimant has some valuable business information that was kept secret.
  2. The information isn't readily ascertainable or generally known.
  3. The claimant made reasonable efforts to maintain its secrecy.
  4. The defendant acquired the trade secret through improper means.

What is trade secret called now?

Trade Secret is now the much loved European retailer TK Maxx! TK Maxx is famous for offering big brands at small prices. We stand for bringing you exceptional value on an ever-changing selection of big brand, designer and high quality fashion apparel and homewares every day.

What are five examples of trade?

Types of Trade: Internal, External, Wholesale, Retail & More. Trade, an activity essential to any economic system, involves buying, selling, or exchanging goods and services.

What is legally considered a trade secret?

Courts sometimes refer to the Restatement of Torts and the Restatement (Third) of Unfair Competition for guidance on common law definitions. The Restatement of Torts defines a trade secret as business information that provides a competitive advantage to those who are not aware of it or not using it.

What is the maximum penalty for theft under $5000?

The maximum penalty for theft under $5,000 varies significantly by state but often falls into a felony or serious misdemeanor, potentially leading to years in prison (e.g., 1 to 5 years) and substantial fines (e.g., $1,000 to $3,000+), depending on the jurisdiction and prior offenses, with some states treating $1,000-$5,000 as a felony (like Louisiana or Colorado) and others having higher felony thresholds. 

What is a real life example of a trade secret?

A trade secret is information that a business keeps confidential to maintain a competitive advantage. Well-known examples include the Coca-Cola formula and the recipe for Kentucky Fried Chicken.

What are the three requirements for a trade secret?

In general, a trade secret has three parts: (1) information (2) economic value from not being generally known by others, and (3) reasonable efforts have been taken to protect the trade secret.

What was the stupidest lawsuit ever?

We all know the most famous frivolous lawsuit story. Stella Liebeck sued McDonald's back in 1992 when she spilled hot coffee on herself. "But coffee is meant to be hot" we all cry. Dig a little deeper into the case however and it starts to look less frivolous.

What are some 5 examples of trademarks?

Five examples of trademarks are the Nike Swoosh (logo), Coca-Cola (word/brand name), the McDonald's Golden Arches (logo), the Apple logo (symbol), and the Tiffany Blue Color used for its boxes (color/trade dress), protecting brand identity and distinguishing products in the marketplace. 

What are some examples of misappropriation?

Misappropriation can be the use of your name, picture, your voice, or something else that is directly associated and recognized as part of your image and likeness. An example of misappropriation is when Bette Midler won a case against Ford Motor Company after they used a sound-alike performer for an advertisement.

Can you go to jail for trade secret infringement?

Penalties

Theft of trade secrets is a felony level offense that is punishable by up to three years in prison. In addition, someone convicted of this offense may have to pay restitution for any damage caused as a result of the theft.

What are the two biggest limitations to trade secret protection?

Trade Secret Disadvantages

Once a trade secret is made public, anyone may use it at will. Trade secrets are more difficult to enforce than patents, and the level of protection provided by trade secrets is generally considered weak compared with the protection granted by patents.

What is evidence that cannot be used in court?

Evidence not admissible in court typically includes illegally obtained evidence (violating the Fourth Amendment), hearsay (out-of-court statements used for their truth), irrelevant or speculative information, privileged communications (like psychotherapist-patient), and confessions obtained through coercion, with rules varying slightly by jurisdiction but generally focusing on reliability, legality, and relevance. 

What's the easiest lawsuit to win?

Generally, dog bite cases (in strict liability states) and clear-liability car accidents are the easiest lawsuits to win. These cases often have straightforward evidence, clear negligence, and well-established laws backing plaintiffs.

Can screenshots of messages be used as evidence?

Yes, screenshots of messages can be used as evidence, but they are often considered weak or unreliable on their own because they can be easily edited, cropped, or taken out of context, making them difficult to authenticate; courts prefer original messages with complete metadata (dates, times, sender info) and often require extra proof, like testimony or forensic analysis, to confirm they are genuine.