Trade secrets are one of the most affordable and useful forms of intellectual property (IP) protection that is available to startups and small companies that are on a tight budget as they start to build their business. Other forms of intellectual property protection, such as patents and trademarks, often require the skills of a specialized IP lawyer in order to secure protection, and there are fees associated with obtaining these IP rights. Trade secrets are an attractive form of intellectual property protection because the mere act of keeping useful business information secret and from being known by the general public is all that is required to create a trade secret. However, trade secret protection can also be just as easily lost if the secret gets out. As such, trade secrets can be one of the most useful and affordable, yet risky, forms of intellectual property protection that is available to small businesses.
What Are Trade Secrets?
Any information that gives a business a competitive advantage and has economic value due to the fact that the information is kept a secret can be considered a trade secret. Trade secrets can be knowledge, information, a device, a tool, a method of doing something, a recipe, schematics, or nearly anything. Trade secret protection is created when the holder of the trade secret actively takes steps to keep the information secret. So long as the information remains a secret, the trade secret holder can have trade secret protection - potentially indefinitely.
How To Protect A Trade Secret
Trade secret holders need to actively go about protecting their intellectual property. This means taking steps and precautions to ensure that the trade secret does not fall into the wrong hands, that the trade secret is not used in an unauthorized manner, or that the trade secret is not accidentally disclosed to the public. When the secret gets out, it is referred to as the misappropriation of the trade secret, and protection is lost from then on. However, trade secret holders may have a legal cause of action when their trade secrets are wrongly misappropriated.
A few measures that can be used to protect the secrecy of a trade secret include:
What Is, and Is Not, Misappropriation of a Trade Secret
Misappropriation is the improper acquisition of trade secret information, the unauthorized use of trade secret information, or the disclosure of trade secret information to the public. When a trade secret is wrongly misappropriated, either by deliberate theft of the trade secret, or inadvertent disclosure, and the trade secret holder has actively taken steps to prevent the loss of trade secret protection, the trade secret holder can seek to enforce the trade secret protection through the courts. The trade secret holder can request an injunction that will prevent the entity that misappropriated the trade secret information from disclosing it or using it, and can also seek damages for any losses that are the byproduct of the misappropriation.
Conversely, independent discovery of a trade secret, and reverse engineering of a trade secret, is not misappropriation. If trade secret information is learned from either independent discovery or reverse engineering, then the party who learned the trade secret information is free to use what they have learned for their own purposes.
Keystone Scientific, Inc. is in the business of connecting clients with the right people having the right skills to meet their project needs. How can we help you achieve your goals and solve your project problems? Please feel free to reach out to our team by calling 814-205-3393 or contact us online.
What Are Trade Secrets?
Any information that gives a business a competitive advantage and has economic value due to the fact that the information is kept a secret can be considered a trade secret. Trade secrets can be knowledge, information, a device, a tool, a method of doing something, a recipe, schematics, or nearly anything. Trade secret protection is created when the holder of the trade secret actively takes steps to keep the information secret. So long as the information remains a secret, the trade secret holder can have trade secret protection - potentially indefinitely.
How To Protect A Trade Secret
Trade secret holders need to actively go about protecting their intellectual property. This means taking steps and precautions to ensure that the trade secret does not fall into the wrong hands, that the trade secret is not used in an unauthorized manner, or that the trade secret is not accidentally disclosed to the public. When the secret gets out, it is referred to as the misappropriation of the trade secret, and protection is lost from then on. However, trade secret holders may have a legal cause of action when their trade secrets are wrongly misappropriated.
A few measures that can be used to protect the secrecy of a trade secret include:
- Consistently and diligently using nondisclosure agreements with employees, contractors, vendors, suppliers, customers, etc.
- Limiting access to the trade secret information to only those employees or people that need to know the secret information.
- Keeping the trade secret information in a restricted place, e.g., locked up, password protected, etc.
- Labeling any trade secret documentation as “confidential.”
What Is, and Is Not, Misappropriation of a Trade Secret
Misappropriation is the improper acquisition of trade secret information, the unauthorized use of trade secret information, or the disclosure of trade secret information to the public. When a trade secret is wrongly misappropriated, either by deliberate theft of the trade secret, or inadvertent disclosure, and the trade secret holder has actively taken steps to prevent the loss of trade secret protection, the trade secret holder can seek to enforce the trade secret protection through the courts. The trade secret holder can request an injunction that will prevent the entity that misappropriated the trade secret information from disclosing it or using it, and can also seek damages for any losses that are the byproduct of the misappropriation.
Conversely, independent discovery of a trade secret, and reverse engineering of a trade secret, is not misappropriation. If trade secret information is learned from either independent discovery or reverse engineering, then the party who learned the trade secret information is free to use what they have learned for their own purposes.
Keystone Scientific, Inc. is in the business of connecting clients with the right people having the right skills to meet their project needs. How can we help you achieve your goals and solve your project problems? Please feel free to reach out to our team by calling 814-205-3393 or contact us online.
Written by Amber Stiles
The information contained in this blog is for informational and educational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. The information contained in this blog reflects the most current legal developments at the time it is written; accordingly, information contained in this blog is not promised or guaranteed to be correct or complete. Please consult with a lawyer if you have any questions or legal matters that need addressing.
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