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The Secret to Dressing

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Disclaimer: This article does not contain any tips for dressing well.

Instead, I address what happens if one of your employees walks out the door to join a competitor and that competitor begins to produce products that look suspiciously like yours. Hypothetically, you do not have a noncompete agreement with the employee and you have no evidence the employee took anything that was a trade secret. How this product looks is not a secret, because the product is sold to many customers. Is there anything to be done?

The answer may be found in a case recently filed by Away, a New York-based luggage company (and Instagram darling), alleging that a manufacturer created, and a department store then sold, competitive luggage that infringes the “trade dress” of their luggage. Away also sued for misappropriation of trade secrets, claiming that the manufacturer used its confidential information in order to create the allegedly trade dress infringing luggage.

A bit of background here: trade dress and trade secrets are legally opposite concepts. To have a trade secret, a company must take reasonable steps to keep it secret. Trade dress is not secret. In fact, if it is secret, it may not be trade dress.

Trade dress is, generally, the distinctive appearance of a product or business, excluding its purely functional elements. For example, in Away’s lawsuit, it argues that the trade dress for its luggage includes its matte finish, rectangular shape with rounded corners, and black contrasting components such as handles and zippers. These features are not secrets. The opposite: Away’s lawsuit includes a screenshot of an Instagram comment in which a user allegedly remarks on the visual similarities between the defendant’s luggage and Away luggage.

The Away lawsuit shows that a potential trade dress issue can also indicate a potential trade secrets theft. But, trade dress issues may not come to light as quickly as trade secrets issues. Thus, when an employee leaves for a competitor, it would be wise to keep your eye on that competitor’s products in the marketplace.

Happy dressing.

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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.