What is trade secret?
A trade secret is any information that is closely guarded by the owner from public exposure because it allows the owner a competitive advantage in the market. The difference between trade secrets and trademarks, patents, and copyrights is that trade secrets are not registered with the government; instead they are privately protected by the owner.
How Can I Protect an Asset so that it Qualifies as a Trade Secret?There are some factors that should be considered when determining whether a certain asset could be considered a trade secret by law:- How valuable the information is to the company and how valuable it would be to its competitors - the greater the value, the more likely it is a trade secret protected by law.
- The effort it would take to duplicate the information - If little effort is needed, most likely it is not a trade secret.
- How many outside of the company know the information - If it is extensively known outside the company, it cannot be qualified as a "secret"
- How protective the company is of the information - the greater the effort to keep the information secret, the more likely it is a trade secret.
- How much the company invested into acquiring the information - the more money, time, and resources the company put into developing the information, the more likely it is a trade secret.
What Rights Does the Owner of a Trade Secret Have?The owner of trade secret can prevent the following people from benefiting from the information:- Anyone who signs a nondisclosure agreement, promising not to reveal the trade secret to anyone else.
- Anyone who acquires the information through illegal means, such as industrial espionage.
- Anyone who acquires the information by accident, but knows it is a trade secret.
Anyone who discovers the trade secret independently, like through reverse engineering, is not prevented by law from using the trade secret, and may benefit from it.
What Can I Do if Someone Else is Improperly Benefiting from My Trade Secret?Acquiring a trade secret through illegal means, such as theft, can be both a state and federal crime that could be punishable with up to $5,000,000 in fines and 10 years in prison. Therefore you may need to contact either the state or U.S. Attorney General to pursue criminal action against the perpetrator. In addition, you may want to contact an intellectual property attorney because you might be able to obtain an injunction against the beneficial use of the trade secret by the perpetrator, as well as the possibility of money damages. |
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