TRADE SECRETS

Protecting one's ideas and information using Trade Secret law should be contrasted along with patents.  Notably, while Patents require the disclosure of information to be patented, Trade Secret requires the opposite (i.e. that information be kept confidential and "secret").  Further, Patents, at best, last 20 years from the date of filing a patent application while Trade Secrets, like diamonds, are forever. For example, the process of making "Coke" may make a valuable patent but the process may be more valuable if kept secret (especially 20+ years down the road after which a patent will have expired). 

 

Trade secrets include formulae, practices, processes, designs, instruments, patterns, commercial methods, or compilation of information, such as customer or client lists, which are not generally known or reasonably ascertainable by others, and which give a business an economic advantage over competitors or customers.

 

Trade secrets are sometimes considered to be "confidential information”, but the term is broader than that.  In order for something to be considered a trade secret, the business must take reasonable steps to safeguard the secrets.  What steps are required will depend upon many factors, such as the nature and size of the business, the information to be deemed a secret, knowledge in the industry and the like.  

 

STATE LAW

What may be considered a trade secret and the steps required to protect it are subject to state law. Most states have a law defining trade secrets and the remedies available in the event of their theft. Most states have also adopted the Uniform Trade Secrets Act.

 

Although not every company has patentable inventions, every company has trade secrets and they should be protected against disclosure or unauthorized use by others. Customer lists, equipment specifications, formulas, even lists of clients' birthdays can be very valuable. The point is to recognize the value of trade secrets to  your business and treat them accordingly.

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