It is unfortunate that other Intellectual Property vehicles, such as patents, copyrights, and trademarks, do not always do the job of protecting an innovator’s intellectual assets.  In certain circumstances, though an innovator might want society to fully benefit from his or her innovation, these other vehicles do not permit the innovator to receive just compensation for what went into developing his or her innovation.  In these situations, the economies are such that it is in his or her best interest to keep certain information secret.  The law recognizes this position of the innovator in the form of trade secret protection.

Trade secrets are generally formulas, patterns, compilations, programs, devices, methods, techniques, or processes.  They must have independent economic value, cannot be generally known or easily figured out by one who might then gain economic value from them, and there must be obvious and reasonable efforts to maintain their secrecy.  Trade secrets may be either technical information or business information.  Examples include designs for specialized equipment, formulas (e.g., the Coca-cola formula), methods of manufacturing, engineering notebooks, negative information such as designs that did not work, computer software, and/or manufacturing information, to name a few.      

Finally, and most importantly, in order to qualify as a trade secret, there must be obvious and reasonable efforts to maintain its secrecy.  Determining whether one has taken obvious and reasonable efforts to maintain a trade secret is often a very difficult task, as there is no clear standard for what types of measures must be taken.  What is reasonable depends on the particular business and the particular secret being kept.  When it comes to the business, a very small company may require different measures to be put in place than a very large one.

So what are some example steps that can be taken by a company to maintain a trade secret?  Above all else, the trade secret owner needs to be vigilant about guarding the secret information, and needs to be able to prove that he or she was vigilant, should the time ever come to show down.  Actions that can be taken include marking information as confidential, controlling access to the secret as well as documenting entry and access to the trade secret, having non-disclosure agreements put in place for people who have access to the secret, limiting public access to the company, using caution internationally as not all countries respect trade secret protections, being vocal about confidentiality policies, training personnel to deal with and keep information secret, requiring passwords for computers containing sensitive information, maintaining secrecy with outside visitors, and having a protocol put in place in the event that the secret is stolen.  

Being able to show that you have been vigilant in guarding a trade secret through taking as many steps of the aforementioned steps as possible, and more, will go a long way toward proving that you have a trade secret.        

This article was authored by John P. Powers, is intended to keep readers current on matters affecting intellectual property and is not intended to be legal advice. If you have any questions about its content, please leave a comment below.

©John P. Powers, 2021, all rights reserved.