In the District of Columbia, trade secret claims are governed by the D.C. Uniform Trade Secrets Act, D.C. Code §§ 36–401 to 36–409. “Misappropriation” covers acquiring a trade secret by improper means, and disclosing or using one without consent where the person knew or had reason to know how it was obtained. The remedies are real: an injunction under § 36–402, actual loss plus unjust enrichment — or a reasonable royalty — under § 36–403, exemplary damages up to twice that award for willful and malicious misappropriation, and attorney’s fees under § 36–404. The clock is three years from discovery.
What qualifies as a trade secret in DC?
Two elements, and the second is where most claims are won or lost — the information must actually have been protected.
(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (A) Derives actual or potential independent economic value, from not being generally known to, and not being readily ascertainable by, proper means by another who can obtain economic value from its disclosure or use; and (B) Is the subject of reasonable efforts to maintain its secrecy.
D.C. Code § 36–401(4)
“Reasonable efforts to maintain its secrecy” is a factual question decided on what the company actually did — access controls, confidentiality agreements, exit procedures. A company that never restricted the information will struggle regardless of how valuable it was.
What counts as misappropriation?
Misappropriation covers both acquiring a trade secret through improper means and disclosing or using one without consent where the person knew or had reason to know it came from improper means or a duty of secrecy.
(2) “Misappropriation” means: (A) 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 (B) Disclosure or use of a trade secret of another without express or implied consent by a person who: (i) Used improper means to acquire knowledge of the trade secret; or (ii) At the time of disclosure or use, knew or had reason to know that 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; (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 (iii) Before a material change in his or her position, knew or had reason to know that the information was a trade secret and knowledge of the trade secret had been acquired by accident or mistake.
D.C. Code § 36–401(2)
What are “improper means”?
Improper means is defined by statute as theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.
(1) “Improper means” means theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.
D.C. Code § 36–401(1)
Note what the list turns on: theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, and electronic espionage. The duty-to-maintain-secrecy limb is why confidentiality obligations matter so much in practice.
Can we get an injunction?
(a) Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for a reasonable period of time to eliminate commercial advantage that otherwise would be derived from the misappropriation. (b) In exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited. Exceptional circumstances include, but are not limited to, a material and prejudicial change of position prior to acquiring knowledge or reason to know of a misappropriation that renders a prohibitive injunction inequitable. (c) In appropriate circumstances, an affirmative act to protect a trade secret may be compelled by court order.
D.C. Code § 36–402 — Injunctive relief
Two features worth knowing: threatened misappropriation may be enjoined, not only completed misappropriation; and an injunction may be continued after the secret ceases to exist for a reasonable period to strip out the commercial advantage gained. See also emergency injunctions and TROs.
What can be recovered?
(a) A complainant is entitled to recover damages for misappropriation, unless a material and prejudicial change of position prior to acquiring knowledge or reason to know of the misappropriation renders a monetary recovery inequitable. Damages may include both the actual loss caused by the misappropriation and the unjust enrichment caused by the misappropriation that is not taken into account in computing actual loss. Instead of damages measured by other methods, the damages caused by misappropriation may be measured by the imposition of liability for a reasonable royalty for the unauthorized disclosure or use of a trade secret by a misappropriator. (b) If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice the award made under subsection (a) of this section.
D.C. Code § 36–403 — Damages
| Remedy | What the statute provides | Section |
|---|---|---|
| Injunction | Actual or threatened misappropriation may be enjoined; may continue for a reasonable period to eliminate commercial advantage | § 36–402(a) |
| Royalty in lieu of injunction | In exceptional circumstances, future use may be conditioned on payment of a reasonable royalty | § 36–402(b) |
| Actual loss + unjust enrichment | Both, where the enrichment is not already counted in actual loss | § 36–403(a) |
| Reasonable royalty | An alternative measure instead of damages measured by other methods | § 36–403(a) |
| Exemplary damages | Up to twice the § 36–403(a) award, for willful and malicious misappropriation | § 36–403(b) |
| Attorney’s fees | To the prevailing party for a bad-faith claim, bad-faith injunction motion, or willful and malicious misappropriation | § 36–404 |
When are attorney’s fees available?
The court may award reasonable attorney’s fees to the prevailing party if: (1) A claim of misappropriation is made in bad faith; (2) A motion to terminate an injunction is made or resisted in bad faith; or (3) Willful and malicious misappropriation exists.
D.C. Code § 36–404 — Attorney’s fees
Fees run in both directions. A company that brings a trade secret claim in bad faith can be ordered to pay the other side’s fees — which is a reason to test the “reasonable efforts” element honestly before filing.
How is the secret protected during the lawsuit?
This is the practical worry for most companies — that suing over a secret exposes it. The statute addresses it directly and makes preservation mandatory.
In an action under this chapter, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, or sealing the records of the action and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.
D.C. Code § 36–405 — Preservation of secrecy
How long do we have to sue?
A D.C. misappropriation claim must be brought within three years of when it was discovered or reasonably should have been discovered, and a continuing misappropriation counts as a single claim.
An action for misappropriation must be brought within 3 years after the misappropriation is discovered or, by the exercise of reasonable diligence, should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim.
D.C. Code § 36–406 — Statute of limitations
Three years from discovery, or from when reasonable diligence should have discovered it — and a continuing misappropriation counts as a single claim, so an ongoing course of conduct does not restart the clock. Deadlines are legally consequential; confirm yours with counsel on your facts.
Frequently asked questions
Is a customer list a trade secret?
It can be, if it meets § 36–401(4) — independent economic value from not being generally known or readily ascertainable, and subject to reasonable efforts to keep it secret. Separately, D.C.’s non-compete statute defines “proprietary employer information” to include customer and client lists, and excludes restrictions on that information from the non-compete ban. See non-compete disputes.
Do we need a signed NDA to have a claim?
No. Misappropriation can rest on improper means or on a duty to maintain secrecy arising from the circumstances. An NDA helps prove both the duty and the reasonable efforts, which is why it matters evidentially. See NDA and confidentiality disputes.
What if the employee memorised the information rather than copying it?
The statute is about acquisition, disclosure and use — not the medium. The questions remain whether the information qualifies under § 36–401(4) and whether the acquisition, disclosure or use fits § 36–401(2).
Can we recover the profits they made?
§ 36–403(a) allows unjust enrichment caused by the misappropriation, to the extent it is not already counted in actual loss — and where the conduct was willful and malicious, § 36–403(b) permits exemplary damages up to twice that award.
Who can be liable besides the person who took the information?
Corporations and other organizations, not just individuals. D.C. Code § 36–401(3) defines a person as including a corporation, estate, trust, partnership, association, joint venture, government or governmental subdivision or agency, or any other legal or commercial entity — so the receiving business is a defendant in its own right.
Why is a claim possible where there was never a signed agreement?
Because the duty can arise from the circumstances. D.C. Code § 36–401(2)(B)(ii)(II) reaches a person who, at the time of disclosure or use, knew or had reason to know the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use.
Where can a defendant outside the District be sued?
Frequently in the Superior Court of the District of Columbia. D.C. Code § 13–423(a)(3) reaches a person, acting directly or by an agent, as to a claim arising from causing tortious injury in the District by an act or omission in the District.
Sources and legal authorities
- D.C. Code § 36–401 — Definitions
- D.C. Code § 36–402 — Injunctive relief
- D.C. Code § 36–403 — Damages
- D.C. Code § 36–404 — Attorney’s fees
- D.C. Code § 36–405 — Preservation of secrecy
- D.C. Code § 36–406 — Statute of limitations
General information about D.C. law, not legal advice. Limitation periods are fact-specific — do not rely on this page to calculate your deadline.
Related: Unfair Competition · Non-Compete Disputes · NDA / Confidentiality Disputes · Non-Solicitation Disputes · Emergency Injunctions · Business Litigation. Call (301) 901-3109 or use the contact page.