Illinois and Federal Trade Secret Law

Intellectual property, and also trade secrets - a cousin to intellectual property - are sometimes the most valuable of a business’s assets. Illinois and federal law both contain established protections for trade secrets.

In 1995, Illinois enacted the Illinois Trade Secrets Act, 765 ILCS 1065/1, et seq. Before 1995, in Illinois there was only common law protection for trade secrets based on courts’ interpretations of the Restatement of Torts. While the Trade Secrets Act is the starting point, because it expressly displaces all common law theories of trade secret misappropriation, Illinois courts continue to recognize and retain the Restatement of Torts as authority that informs courts’ application of the Illinois Trade Secrets Act.

The fundamental and operative concept for protection and liability under the Trade Secret act is to protect against misappropriation of a trade secret. A cause of action for misappropriation requires a plaintiff to plead and prove three elements: (1) the existence of a trade secret; (2) misappropriation of a trade secret; and (3) damages.

To constitute a trade secret, its owner must have taken - and the plaintiff must prove - reasonable precautions or efforts to protect the secrecy of the information or process from which the plaintiff derives economic value from the secrecy. Otherwise, there is no trade secret. Also, it is important to understand that trade secrets are protected only from unlawful or improper misappropriation. Our related discussions of ethical hacking and reverse engineering are here.

Assuming a trade secret owner has in fact taken reasonable steps to protect the confidentiality of its business’s secret information, the Illinois Trade Secrets Act provides business owners and sole proprietorships strong protection. In practice, the Illinois Trade Secrets Act offers protections for what are often predictable scenarios that tend to follow certain fact patterns, and defines a “trade secret” as:

— information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that:

  1. is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and
  2. is the subject of efforts that are reasonable under the circumstances to maintain secrecy or confidentiality.

The fact patterns that tend to define trade secret disputes and litigation are when:

  • Without authority an employee takes confidential information, proprietary information and/or trade secrets and related hard copy files when leaving the company to work for a competitor or to start a competing business; or
  • To develop a competing or similar product, a person or his or her business uses confidential information that violates a written non-disclosure or confidentiality agreement.

Our related discussions of litigation involving non-competition and non-solicitation agreements are here, and emergency protections are [here].

While the Illinois Trade Secret Act contains a five-year statute of limitations, and provides for the award of attorneys’ fees in certain circumstances, we do not recommend ever waiting very long at all to enforce misappropriation claims, because doing so undermines the assertion that the information is secret, and that secrecy gives the misappropriated information value. In other words, the liberal five-year limitations period is to preserve claims for later discovered misappropriation, but should never be used as a license not to seek immediate protection upon discovery.

In 2016, state law trade secret protection was enhanced by Congress with passage of the Federal Defend Trade Secrets Act, which is modeled on the Uniform Trade Secrets Act, from which the Illinois Trade Secrets Act is also derived (though different in some respects). The Defend Trade Secrets Act enhances the protection afforded by the Illinois Trade Secrets Act, primarily because it guarantees access [subject matter jurisdiction] in the federal courts with the option of an ex-parte process to recover a misappropriated trade secret.

Legal liability for misappropriation and protection from it is an ever-evolving, highly fact-specific area of law. Trade secret attorneys for people accused of misappropriation, and attorneys for the commercial enterprises who need protection from misappropriation of trade secrets, must have extensive knowledge of trade secret law to defend or advance the rights of our clients. Our trade secret attorneys have over thirty years of experience generally, and cutting edge experience that has evolved with this ever developing legal field. Our trade secret attorneys are committed to protecting our clients’ personal or commercial interests. Located in Chicago and Elmhurst, Illinois, we have won judgments or settlements for our clients in disputes or suits throughout the Chicago area. To arrange for a consultation with one of our attorneys, contact us online or call at 630-333-0333.

The attorneys at Lubin Austermuehle have over thirty years of experience defending and prosecuting non-compete, trade secret and restrictive covenant lawsuits. We are committed to fighting for our clients' rights in the courtroom and at the negotiating table. Conveniently located in Chicago and Elmhurst, Illinois, we have successfully litigated non-compete and trade secret and covenant not to compete cases for clients all over the Chicago area. To schedule a consultation with one of our skilled attorneys, you can contact us online or give us a call at 630-333-0333.

Client Reviews
I was referred to Peter Lubin from someone in the car business to handle a law suit. From the moment I made the appointment Peter and his staff were outstanding. This wasn't an easy case, most lawyers had turned me down. However, Peter took the time to meet with me and review everything. He took on the case, and constantly communicated with me about updates and case information. We beat this non-compete agreement case in record time. I would use him again and recommend him to my closest family and friends. 5 stars is not enough to thank him for his service. Sebastian R.
I worked on two occasions with Peter Lubin and his staff. They took their time with me and discussed each and every item in detail. The group makes you feel like you are part of the family and not just another hourly charge. I recommend Peter to anyone who asks me for a referral. If you are looking for a top notch attorney at a reasonable rate, look no further than Lubin Austermuehle. Kurt A.
Excellent law firm. My case was a complicated arbitration dispute from another state. Was handled with utmost professionalism and decency. Mr. Peter Lubin was able to successfully resolve the case on my behalf and got me a very favorable settlement. Would recommend to anyone looking for a serious law firm. Great staff and great lawyers! Albey L.
I have known Peter Lubin for over 30 years. He has represented me on occasion with sound legal advice. He is a shrewd and tough negotiator leading to positive outcomes and averting prolonged legal hassles in court. He comes from a family with a legal pedigree and deep roots in Chicago's top legal community. You want him on your case. You need him on your opponents case. He won't stop fighting until he wins. Christopher G.
Peter was really nice and helpful when I came to him with an initial question about a non-compete. Would definitely reach out again, recommended to everyone. Johannes B.