Kartov Corporation is in the business of developing pharmaceutical products. It uses a number of highly technical secret processes in its business. Martin worked for the company for five years and then left after an argument with one of the vice

Question

presidents of the company. He then went to work for one of Kartov's competitors, which has begun to market similar products that seem to have been produced using the secret processes developed and used by Kartov. What, if any, recourse does Kartov have under the circumstances?

Answer 1

Martin seems to have misappropriated trade secrets belonging to Kartov. An employee is under a duty of loyalty to his employer, which includes the nondisclosure of trade secrets to competitors. It is also wrongful for a competitor to obtain vital trade secret information from an employee. If there was a contractual restriction on disclosure of information by an employee after termination of employment, then Kartov may enforce that provision. In the absence of a contractual restriction, an employee is under no duty upon termination of his employment to refrain from competing or working for a competitor. However, the employee commits a tort by divulging secret information. Kartov may obtain money damages for the misappropriation of trade secrets and may also seek an injunction to prevent the competitor from continuing to use the trade secrets. If any of the processes are covered by the patent laws, then Kartov will have to proceed based on the remedies in the patent laws rather than on those covered by misappropriation of trade secrets.