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Purchaser of product made through use of another entity's trade secret is not liable

Townsend and Townsend and Crew LLP By: Richard Grossman In a comprehensive analysis of the California Uniform Trade Secrets Act (Civil Code §3426 et seq.) ("CUTSA"), the California Court of Appeal recently determined that a seller's unauthorized use of trade secrets in the creation of its product does not impose liability for misappropriation of the trade secrets on those who merely purchase and use the product, even if the purchasers were on notice of the alleged trade secret theft. In Silvaco Data Systems v. Intel Corporation1, the alleged trade secret was Silvaco's source code for computer applications used to design and simulate electronic circuits and systems. In prior litigation, Silvaco had obtained a judgment against Circuit Semantics, Inc. ("CSI"), a competitor that had misappropriated Silvaco's source code and used it to create a competing software product. In order to continue reading this interesting article from Lexology, please click here.

Full post as published by The Trade Secrets Vault on May 19, 2010 (boomark / email).