What is a Trade Secret?
Have you created a product that is entitled to protection? What do you have to do in order to make sure that your business secrets, known as “trade secrets,” are protected?
The most common example of a trade secret is the recipe for Coca Cola. The fact that you can only buy Coke from Coke is not an accident. To qualify as a trade secret, the information that you seek to protect must have economic value and must be something that cannot be easily discovered by others. In other words, if you can find the “secret” by doing a Google search, it is obviously not a secret.
There are several things that are generally considered trade secrets: design specifications for a computer system, confidential customer lists, and unique formulas or computer programs. Think Coca Cola. You cannot make it at home and you cannot get the recipe for it on the internet either. It is a very carefully protected trade secret. It is believed that only two employees have the formula for making Coca Cola, and the location of that formula is itself a secret.
So, how do you protect your trade secrets?
To begin, your employees should sign a confidentiality agreement. The agreement should specify what the company considers its trade secrets to be, that the company intended to, and did, create those secrets itself, and that the company has taken steps to protect those secrets. The bottom line is that the company must do something, and be able to prove that it did something, to actively protect its trade secrets. The best remedy is a written agreement coupled with a clearly expressed corporate policy on what the company considers its trade secrets to be and how it protects those secrets.
If you ever have to sue in order to prevent someone from stealing your trade secrets, this is what you will have to prove to the Court: (1) that your company possessed secret information and took reasonable steps to protect it from being disclosed in the marketplace; and (2) the secret was stolen, either by one who knew or had reason to know that the secret was improperly obtained or by one who used improper means to obtain it.
If companies take reasonable steps to protect their trade secrets in advance, it is less likely that the company will later become involved in time consuming and costly trade secret litigation.
Trade secrets cases fall under our Complex Business and Commercial Litigation in State and Federal Court practice area. Contact us to speak with an attorney who is experienced in this area, if you find that you may have a case.