Trade secrets are a type of intellectual property that can be protected under both U.S. and international law. But what can be considered a “trade secret?” In order for information to be deemed as such, it must be something that is not generally known to people outside your business and it cannot be easily discovered by someone else in your profession or field. Additionally, it must be valuable because it is a secret. In short, the trade secret must give you some type of business advantage.
Generally, trade secrets tend to be formulas, patterns, compilations, programs, devices, methods, techniques or processes that you created and/or own. For example, your trade secret could be your R&D methodology or information, a specific invention that is totally yours, an exclusive recipe or even some kind of software system. A particularly well-known example of a trade secret would be Kentucky Fried Chicken’s chicken recipe (you know, those 11 herbs and spices they’ve talked about on TV for many years but never specified).
Do You Have Trade Secrets and If So, What Laws Will Protect Them?
If you have no clue as to whether or not you even have trade secrets that need protecting, there are a number of questions you can ask yourself to make the determination. First, would it put you at an economic disadvantage if your competition knew particular things about your business enterprise? Also, do you have the ability to isolate those things? Would it be hard or impossible for individuals on the outside to discover those things themselves? If your answer is yes to those questions, there’s a good possibility that your business has some secrets that should be protected.
In the United States, The Defend Trade Secrets Act of 2016 created a civil cause of action at the federal level, which strengthens U.S. trade secret protections. The federal law’s protection is in addition to applicable state laws that also protect trade secrets. From an international standpoint, all parties to the World Trade Organization (WTO)’s Agreement on Trade Related Aspects of Intellectual-Property Rights (TRIPS) are obligated to provide trade secret protection.
So, What Do I Do to Protect My Trade Secrets?
Trade secret protections will last until the secrets are discovered and are no longer secrets. Since the holder of the trade secret is only protected from misappropriation, if he or she neglects to protect the trade secret, or if the information is independently found out or it otherwise becomes generally known, the trade secret’s protection is lost. That said, it is up to the holder of the trade secret to take reasonable steps to protect it.
Common sense approaches include marking information “confidential” and keeping access secure and password protect all files. Anyone who possibly could have access needs to be put on notice that the information is protected as a trade secret. Make sure your employees and others sign non-disclosure agreements (NDAs) and be sure to advise them on the proper procedures with respect to how they can keep the information secure.
