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| IT and IP Law |
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| Trade Secrets |
 Trade secrecy law protects confidential
information that has commercial value. Unlike copyright law, trade secrecy
law protects the ideas themselves. Protectable trade secrets may include
inventions, whether patentable or not. It may also include sensitive competitive
information, such as customer lists, methods of doing business, financial
information and the like.
The Uniform Trade Secrets Act, adopted in about 40 states, defines a “trade
secret” (in Section 45) as:
information, including a formula, pattern, compilation,
program, device, method, technique, or process, that:
- Derives independent economic value, actual or potential, from not
being generally known to the public or other persons who can obtain
economic value from its disclosure or use; and
- Is the subject of efforts that are reasonable under the circumstances
to maintain secrecy.
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One important advantage of maintaining information as a trade secret is
that a trade secret can last as long as the information remains a secret.
The formula for Coca Cola, for example, has remained a secret for more
than a century. Once the information goes into the public domain, however,
trade secrecy protection is lost forever.
Trade secrets are protected under state laws in the U.S. as long as the
owner of the secrets takes the appropriate steps to protect their secrecy.
This means, for example, prominently marking all secret information as
trade secrets. Companies that have confidential information they wish to
protect must take steps to safeguard that information. This is an ongoing
effort. The owner of the information should prominently mark it as secret
or confidential, disclose it only to the extent necessary, and obtain confidentiality
agreements where appropriate. Entering into appropriate confidentiality
agreements is another step that owners of trade secrets can take to protect
these secrets. |
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