An employee leaves a business and starts his or her own business. The new business provides similar services in the same market to the same clients. What recourse does the owner of the original business have? What protections does the new business have? These questions underlay a recent lawsuit between two competing Massachusetts dumpling restaurants over trade secrets and intellectual property. The dispute illustrates the fact that even small business need to have a plan for preserving intellectual property and trade secrets, and ensuring that employees do not disclose strategies and secrets to competitors. Likewise, newly created businesses need to figure out how to protect themselves from claims that they're relying on stolen intellectual property or have violated non-disclosure and non-compete agreements.
At a minimum, businesses should have a baseline knowledge of what intellectual property and trade secrets they have and what can be legally protected. Similarly, entrepreneurs should review carefully what their prior and current obligations to former employers are. Advance planning is everything because, as the case of Dumpling v. Dumpling, shows, once the genie is out of the bottle, it's out.