Opinion ID: 204041
Heading Depth: 3
Heading Rank: 3

Heading: Evidence of Trade Secret Misappropriation

Text: Based largely on the testimony of Astro-Med employees, defendants insist that there is no evidence that either Plant or Nihon Kohden ever used any of Astro-Med's confidential information. They contend that this failure dooms Astro-Med's misappropriation claim, which they say requires proof that Astro-Med shared a confidential relationship with the defendant, possessed a trade secret, disclosed it to the defendant, and that the defendant made use of the disclosure in breach of the confidence reposed in him. Burten v. Milton Bradley Co., 763 F.2d 461, 463 (1st Cir. 1985). Defendants' reliance on our discussion of Massachusetts tort law in Burten is misplaced. Astro-Med's misappropriation claim arises under the Rhode Island Uniform Trade Secrets Act, R.I. Gen. Laws § 6-41-1 et seq., which defines misappropriation as follows: (i) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (ii) Disclosure or use of a trade secret of another without express or implied consent by a person who: (A) Used improper means to acquire knowledge of the trade secret; or (B) At the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was: (I) Derived from or through a person who had utilized improper means to acquire it; (II) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (III) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or (C) Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake[.] R.I. Gen. Laws § 6-41-1(2). The Act's definition of improper means includes breach or inducement of a breach of a duty to maintain secrecy. Id. § 6-41-1(1). Misappropriation thus includes disclosure of a trade secret by one who acquired it while under a duty to maintain its secrecy and the acquisition of a trade secret by one who knows that it was acquired by breach of a duty to maintain secrecy. Contrary to defendants' assertion, Astro-Med need not have shown that either Plant or Nihon Kohden used Astro-Med's trade secrets; disclosure or acquisition is sufficient to constitute misappropriation, subjecting defendants to liability for actual loss and unjust enrichment caused by the misappropriation. Id. § 6-41-3(a). Here, there was ample evidence that the very reason Nihon Kohden hired Plant was to obtain access to his intimate knowledge of Astro-Med's business. [8] Viewing the evidence in the light most favorable to the verdict, it is a logical inference that a competitor who hires away a rival's valued employee with access to inside information has done so in order to use that inside information to compete with the rival, and it is an equally logical inference that once Plant became a Nihon Kohden employee, he sought to justify its hiring decision by revealing and using the information Nihon Kohden had bargained for.