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New York Trade Secrets Litigation
Legal Protections and Litigation Strategies
New York is a hub of finance, media, and innovation — industries where trade secrets are often the core of competitive advantage. Litigation over trade secrets in New York is shaped by state common law, the New York Penal Law, and the federal Defend Trade Secrets Act (DTSA).
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1. New York Trade Secrets Litigation: Legal Framework Under State and Federal Law
New York does not have a codified trade secrets statute, unlike many other states that have adopted the Uniform Trade Secrets Act. Instead, New York relies on common law misappropriation claims and statutory protections under the Penal Law (Section 165.07 for unlawful use of secret scientific material).
New York Trade Secrets Litigation: What Qualifies as a Trade Secret?
Courts in New York consider several factors:
- Is the information known outside the business?
- Was it shared with employees under confidentiality?
- Does it provide a competitive advantage?
- Were efforts made to keep it secret?
Examples include source code, financial forecasts, marketing plans, and R&D results.
2. New York Trade Secrets Litigation: Common Scenarios of Misappropriation
Litigation often arises when:
- Employees join competitors and use confidential data
- Joint ventures collapse and one side exploits proprietary info
- Vendors misuse shared information beyond contractual scope
Misappropriation claims may accompany breach of contract, fiduciary duty, or unfair competition claims.
New York Trade Secrets Litigation: Emergency Injunctive Relief
Courts in New York will grant preliminary injunctions if:
- The plaintiff is likely to succeed
- There is imminent, irreparable harm
- The balance of hardships favors the plaintiff
Courts may also issue temporary restraining orders (TROs) in extreme cases.
3. New York Trade Secrets Litigation: Key Legal Theories and Claims
Trade secrets cases in New York frequently involve:
- Common law misappropriation
- Breach of NDA or employment contract
- Breach of fiduciary duty
- Tortious interference with business relations
These claims may be pursued concurrently in state and federal courts.
New York Trade Secrets Litigation: Civil vs. Criminal Enforcement
The New York Penal Law criminalizes certain acts of trade secret theft. Section 165.07 targets the unlawful duplication, use, or transfer of secret scientific material. Prosecutors may also charge defendants under general larceny or computer crimes statutes.
4. New York Trade Secrets Litigation: Managing Evidence and Discovery
Trade secrets litigation requires careful handling of sensitive evidence. Protective orders, sealed filings, and selective redactions are frequently used. Courts in New York allow aggressive discovery, but only if the trade secret definition is clear.
New York Trade Secrets Litigation: Example Protective Protocols
| Protective Tool | Purpose |
|---|---|
| Confidentiality Orders | Limits use of sensitive info during litigation |
| Forensic Imaging Protocols | Ensures chain of custody for digital evidence |
| Attorney’s Eyes Only Designation | Restricts access to outside counsel only |
5. New York Trade Secrets Litigation: Trends and Emerging Risks
Recent patterns include:
- Disputes involving remote workers and cloud storage
- Allegations tied to AI model development and training data
- Increased coordination between civil plaintiffs and law enforcement
New York courts are adapting to evolving risks by refining definitions and evidentiary standards.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading or relying on the contents of this article does not create an attorney-client relationship with our firm. For advice regarding your specific situation, please consult a qualified attorney licensed in your jurisdiction.
