Legal Definitions - Misappropriation

In legal terms, misappropriation refers to the unauthorized, improper, or unlawful use of someone else's funds or property for purposes other than what was intended. This often involves situations where the person committing the act has a special responsibility or duty regarding the funds or property, such as an employee, a trustee, or someone entrusted with valuable information.

Misappropriation can encompass various scenarios, from financial misconduct to the unauthorized use of valuable intellectual property that isn't strictly protected by patents or copyrights.

• Example 1: Misuse of Organizational Funds

  Imagine the treasurer of a local youth sports league, who is responsible for managing the league's finances, uses money collected for new uniforms and equipment to pay for a personal vacation. Even if they intend to repay the money later, this action constitutes misappropriation because they used funds entrusted to them for an unauthorized personal purpose, diverting them from their intended use for the sports league.

• Example 2: Unauthorized Use of Valuable Business Information

  Consider a small, innovative tech startup that spends years and significant resources developing a unique, non-patented algorithm for predicting market trends. A larger competitor, through unethical means, obtains this algorithm and integrates it into their own products without the startup's permission or compensation. This would be a form of misappropriation because the competitor has taken a valuable asset, developed through substantial investment by the startup, and used it for their own benefit, causing harm to the original creator.

• Example 3: Employee Misuse of Company Resources

  A marketing manager at a large corporation uses the company's high-end video production equipment and editing software, which are intended for creating corporate advertisements, to produce and edit promotional videos for their personal side business. This is misappropriation because the manager is using company property and resources for an unauthorized personal venture, diverting them from their intended corporate use and potentially depriving the company of their full work effort.