Trade secrets are defined as any methods, processes or any other data that is not generally known outside of a company or business. In the United States, trade secret protection does not require registration and is not limited in time. Therefore, in contrast to patents, protection of trade secrets may continue indefinitely as long as the information remains secret.
In order to qualify as a trade secret, the information must not be known to the public and the company must take reasonable measures to conceal the information. In addition, the information must have some sort of economic value or benefit to the company.
Arguably, almost every business or company is the owner of some sort of trade secret. There are many types of trade secrets, such as formulas, practices, processes, recipes, algorithms, and lists of suppliers or clients. This information may be considered sensitive since its disclosure could lead to extensive harm to the business. For example, a fast food chain may have a special recipe for their hamburgers. If the recipe were to be known to the public, other fast food restaurants would be able to duplicate the recipe and choose to sell the burgers for a lower price. This could cause significant damage to the fast food chain’s business and profits.
Trade secrets are protected by both state regulations and federal law, specifically the Economic Espionage Act of 1996. According to this law, trade secrets may be "tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing."
Moreover, currently, 47 states in the U.S. have adopted the Uniform Trade Secrets Act (USTA). The USTA defines trade secrets and deals with claims and misappropriation of trade secrets.
Unlike other forms of intellectual property in the U.S., trade secrets do not need to be registered with the United States Patent and Trademark Office (USPTO). Instead, trade secrets are protected by taking a number of internal precautions to prevent the public disclosure of the information. Remember: as long as the information remains confidential, it maintains its status as a trade secret. It is for this reason that Non-Disclosure Agreements (NDA’s) are such an important practice in intellectual property law.
Your company may be home to valuable information that, if made public, could negatively impact your business. Protecting this information is key in maintaining your rights to various forms of intellectual property, such as certain formulas, practices, processes or patterns.
Not sure where to start when it comes to safeguarding your business’s trade secrets? We’re here to help. Contact an experienced intellectual property attorney today at Attorney At Law.