Understanding the Role and Value of Trade Secrets and how to Protect ThemOctober 11, 2015

We all know a core technology can drive a company. As a patent attorney I see this every day.  However, equally important is the Information about the technology or the business itself that can be an invaluable driver of a technology or the company itself. Depending on the technology you work with and the type of company protecting it, you may already fully understand the role and value of trade secrets.  If this is the case, you may be experiencing sleepless nights contemplating how best to protect your trade secrets.  Such protection is critical to maintaining secrecy for ongoing protection of a trade secret. This can be a daunting task when corporate competition is high (meaning your trade secret could walk out the front door with a departing employee) and communications are never ending and at our finger tips (meaning your trade secret could be lost with the click of a mouse).

In this Filewrapper┬« series on trade secrets you will be provided with a more complete value assessment of trade secrets and learn about the distinct role they could play to enhance your intellectual property portfolio.  In addition, various protection schemes will be outlined to assist you in protecting trade secrets.

To start, a primer on trade secrets is warranted. Unlike patents, trade secrets are defined by state laws and the purpose for protection is to reward “fruits of labors”in development the secret information.   This definition for a trade secret includes any information that can be used in the operation of a business that is valuable and secret to afford an actual or potential economic advantage over others. Examples include recipes, manufacturing processes, customer lists, and so on.  The trade secret owner must take reasonable efforts to keep the information secret; therefore, internal controls for maintaining secrecy are key. This means that access to trade secret information should be limited to as few individuals as possible. On occasion (and more often than you may think), a trade secret is used improperly or even stolen. When this occurs, trade secret misappropriation is an available cause of action. There are a number of defenses to such an allegation of misappropriation (or theft), namely that the information does not qualify as a trade secret, that there was independent discovery of the trade secret, or there was reverse engineering allowing the party to arrive at the trade secret.

 

Stay tuned for the next Filewrapper® posting on this series where we will dive into the role and value of trade secrets may have for your company.

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