What is a trade secret and what types of information can trade secrets protect?
A trade secret may consist of any formula, pattern, device, or compilation of information that is used in your business and can provide an advantage in the marketplace over competitors who do not know it. Trade secrets can protect almost any information that has value to your company and is not known by your competitors. Common types of trade secrets include industrial or manufacturing secrets, formulas, processes, production methods, distribution or sales methods, consumer profiles, advertising strategies, and client or supplier lists. While this list is not exhaustive, keep in mind that while a trade secret can be almost anything, it must NOT be known by competitors or the general public to be protected as a trade secret under the law.
What rights do I have as a trade secret owner and how do I protect those rights?
As a trade secret owner, you can prevent others from copying, using, or disclosing the trade secret to others without permission if:
The trade secret is not generally known to the public;
The trade secret has commercial value because others cannot obtain it; and
You have taken reasonable steps to protect the secrecy of the information.
Be aware, however, that if someone discovers your trade secret independently without using illegal means, they cannot be prevented from using it. For example, someone may reverse engineer your product to determine your trade secret and use it in their own products.
To protect your trade secret, you must take adequate steps and precautions to ensure you are keeping the information a secret. This may include marking documents as confidential, making others sign nondisclosure agreements, locking confidential materials away, and maintaining security on all technology. By taking adequate steps to keep your information a secret, if you are put in a situation where you must take someone to court, your actions will show the court that you intended to maintain secrecy.
How long will my trade secret be protected?
Unlike other intellectual property, trade secrets are not registered with any governmental agency and will be protected as long as the secret is kept confidential.
How do I enforce my trade secret rights?
Since 2016, trade secret owners may sue in U.S. federal court for trade secret misappropriation under the Defend Trade Secrets Act. In addition, trade secret owners may bring state statutory claims for trade secret violations. Under both state and federal law, these types of claims must be brought within three years after the misappropriation is discovered or should have been discovered. If you choose to sue under these laws, you may be entitled to an injunction preventing someone from using or disclosing your trade secret, damages for your economic losses resulting from the misappropriation, and damages for the amounts the defendant has been unjustly enriched. Alternatively, you may be entitled to a reasonable royalty for the unauthorized use or disclosure of the trade secrets, including anticipated future uses or disclosures. If you can prove that the trade secrets were misappropriated willfully and maliciously, you may also recover punitive damages and your reasonable attorney's fees.
For assistance with your trade secret claims, but sure to consult an experienced trade secret lawyer. Res Nova Law attorneys can help you with that or we can refer you on if it's not a good fit.