MIAMI BUSINESS LITIGATION: TRADE SECRET STATUTE OF LIMITATIONS

The statute of limitations proscribes the maximum time a litigant can initiate a legal proceeding after the occurrence of an event triggering the litigant’s claim. The limitations period varies depending on the claim type. The statute of limitations for a breach of a written contract is five years whereas the statute of limitations for a breach of an oral contract is only three years. Fla. Stat. § 95.11. Claims brought outside the statute of limitation period can dismissed outright as a matter of law. Schmidt v. Sabow, 331 So. 3d 781 (Fla. 2d DCA 2021) (holding that the trial court erred because it did not dismiss the breach of contract claim under the five-year statute of limitations). The Miami business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

This article focuses on the statute of limitations for trade secret claims. Litigants only have three years to bring such claims without risking outright dismissal. Fla. Stat. § 688.007; 18 U.S.C § 1836. Accordingly, a litigant must bring the claim within three years after discovering the trade secret misappropriation. This makes the date of discovery important because it triggers running of the statute of limitations. As a broad general matter, a litigant need not be concerned with the statute of limitations in a trade secret action until discovery is made. However, determining when, and if, discovery was made can be complicated.

The plain language of the trade secret statute of limitations indicates discovery is broader than actual discovery. Fla. Stat. § 688.007. The claim must be brought “within 3 years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.” Therefore, a litigant cannot overcome the three-year statute of limitations by simply arguing it did not actually know its trade secrets were misappropriated. The litigant will need to show it did not actually know about the misappropriation and should not have known about the misappropriation had it been reasonably diligent in investigating the matter. However, suspicions alone will not trigger the statute of limitations unless the suspicions are great enough to warrant further investigation. Knights Armament Co. v. Optical Sys. Tech., Inc., 654 F.3d 1179 (11th Cir. 2011) (“Courts have typically found that suspicion and concerns alone are insufficient to start the running of the statute of limitations.”). In Fin. Info. Techs., Inc. v. iControl Sys., USA, LLC, 2018 WL 3391379 (M.D. Fla. June 12, 2018), a plaintiff defeated summary judgment by demonstrating its suspicions of trade secret misappropriation did not create a duty to investigate further and determine whether actual misappropriation occurred. Fin. Info. Techs., Inc., 2018 WL 3391379 (“The record evidence… establishes that Fintech was interested in iControl’s entry into the marketplace as a competitor and may have been suspicious about such activities involving misappropriation… but does not show that a reasonable investigation by Fintech would have produced facts sufficient to confirm this suspicion and justify bringing suit.”). By contrast, in Knights Armament Co. v. Optical Sys. Tech., Inc., 654 F.3d 1179, the court determined the plaintiff knew about the misappropriation and granted summary judgment under the statute of limitations because the plaintiff (1) received a letter from its competitor acknowledging the competitor’s potential use of the trade secret (2) sent a response letter to the competitor seeking assurances its proprietary intellectual property would not be compromised, (3) was not satisfied with the competitor’s response, and (4) did nothing to try disproving the competitor’s unsatisfactory response.

The Miami business litigation lawyers of the Mavrick Law Firm also represent clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.