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Washington D.C. Misappropriation of Trade Secrets
Unauthorized use or disclosure of trade secrets can have devastating consequences for businesses. In Washington D.C., such conduct is classified as “misappropriation of trade secrets” and may lead to civil liability or even criminal prosecution. The District adheres to the Uniform Trade Secrets Act (UTSA), adopted in D.C. Code § 36–401 et seq., and also criminalizes certain forms of trade secret theft under D.C. Criminal Code § 22–1832.
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1. Washington D.C. Misappropriation of Trade Secrets | Legal Definition and Protections
Washington D.C. law defines a trade secret as business or technical information that is not publicly known, has commercial value from being kept secret, and is subject to reasonable measures to preserve its confidentiality.
Typical examples include:
- Customer databases
- Software algorithms
- Manufacturing formulas
- Sales and pricing strategies
- Proprietary research
Washington D.C. Misappropriation of Trade Secrets | What Is Considered Misappropriation?
Misappropriation occurs when someone:
- Acquires a trade secret through theft, bribery, or deception
- Discloses it without consent
- Uses it in violation of a duty of confidentiality
Even if the person did not directly steal the information, knowing use or disclosure may still lead to liability.
2. Washington D.C. Misappropriation of Trade Secrets | Civil Remedies and Damage Recovery
Victims of misappropriation in D.C. can file civil lawsuits to obtain relief through injunctions and damages.
Washington D.C. Misappropriation of Trade Secrets | Types of Civil Relief
Under D.C. Code § 36–402 and § 36–403, courts can:
- Issue injunctions to prevent use or disclosure
- Order destruction or return of misappropriated data
- Award compensatory damages
- Grant punitive damages for malicious conduct
Washington D.C. Misappropriation of Trade Secrets | Damage Calculation Methods
Civil damages may be calculated by:
- Determining actual loss suffered by the trade secret owner
- Estimating the unjust enrichment gained by the offender
- Imposing a reasonable royalty for use of the trade secret
If the misappropriation is proven willful and malicious, the court may award exemplary damages of up to twice the base amount.
Washington D.C. Misappropriation of Trade Secrets | Summary of Civil Penalties
Here is a simplified breakdown of potential civil remedies:
- Injunctive Relief: Stops ongoing or future misuse
- Actual Damages: Covers financial loss from the violation
- Unjust Enrichment: Captures profits wrongfully earned
- Reasonable Royalty: Used when loss is hard to measure
- Exemplary Damages: Up to 2x base damages for bad faith
3. Washington D.C. Misappropriation of Trade Secrets | Criminal Penalties and Enforcement
Trade secret theft is not only a civil issue—it can also be a crime in Washington D.C. Under § 22–1832 of the D.C. Criminal Code, individuals who knowingly steal trade secrets can face severe consequences.
Washington D.C. Misappropriation of Trade Secrets | When Does It Become a Crime?
Criminal prosecution applies when someone:
- Knowingly takes, copies, or transmits trade secrets
- Intends to use them for economic advantage
- Causes harm to the rightful owner
Washington D.C. Misappropriation of Trade Secrets | Criminal Penalty Ranges
The severity of the sentence depends on the nature of the offense. The following penalty guide is commonly applied:
- Domestic misappropriation: Up to 10 years in prison or fines up to $25,000
- Foreign or cross-border misappropriation: Up to 15 years imprisonment or fines up to $75,000
- Corporate liability: Companies may face additional penalties or government contract debarment
4. Washington D.C. Misappropriation of Trade Secrets | Prevention and Best Practices
Avoiding legal conflict requires strong internal controls and confidentiality safeguards. Companies operating in D.C. are encouraged to take the following steps:
- Implement non-disclosure agreements (NDAs) for employees and vendors
- Conduct regular trade secret audits and data access reviews
- Restrict physical and digital access to sensitive information
- Train staff on confidentiality obligations
Washington D.C. Misappropriation of Trade Secrets | Internal Response Strategies
If trade secret theft is suspected:
- Initiate an internal investigation immediately
- Secure access logs and communication records
- Notify affected business units and legal counsel
- Consider filing a civil injunction or contacting law enforcement if criminal theft is suspected
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.
