What is a Trade Secret?
Trade Secrets are a special form of Intellectual Property. Simply stated, a trade secret is any confidential information that is not generally known to the public and that gives a business a competitive advantage because the information is not known by its competitors or customers. Trade secrets, sometimes referred to as “confidential information” or “proprietary information,” may include a wide variety of business-confidential information including: formulas, customer/contact lists, marketing plans, purchasing details, distribution systems and pricing information to name a few.
What are some examples of trade secrets?
Some famous examples of trade secrets include the formula of Coca-Cola, the recipe for KFC’s chicken seasoning, and the Google search algorithm. It is possible that the overwhelming majority of all businesses in the United States have some important information they consider to be proprietary and which would cause harm if made known to its competitors.
How do I register my trade secret?
There is not a registration system for trade secrets. Instead, to protect trade secrets a company must take “reasonable” steps to maintain the secrecy of its valuable information. A trade secret will provide its owner with protection for an unlimited period, provided the information remains secret and basic steps are taken to safeguard the information. Basic steps might include:
- Marking all documents describing the secret “CONFIDENTIAL”
- Only sharing details of the secret on a Need-To-Know basis, and then only after the recipient has signed an NDA
- Password protecting electronic files that contain the secret; locking physical records in safes or limited-access filing cabinets
- Putting those with knowledge of the secret on clear notice of its trade secret status
- Keeping good, organized business records relating to the creation and sharing of trade secrets
- Addressing trade secret issues with departing employees (i.e., in an exit interview)
- … and any other steps that would be considered “reasonable” in the particular circumstances
How strong are Trade Secret laws?
Most jurisdictions provide criminal penalties for misappropriation (i.e., theft) of trade secrets. The two modes that most often give rise to misappropriation of trade secrets are: 1) a former (or rogue) employee using their employer’s trade secrets for competitive purposes; and 2) the mishandling of secret information obtained in confidence (usually after signing a Non-Disclosure Agreement (NDA) or other compelling conduct).
Endurance Law Group PLC specializes in all forms of intellectual property, including the protection and enforcement of Trade Secrets. We would be pleased to answer any questions that you might have about trade secrets and your particular circumstances.