Secrets You Need to Know About Trade Secrets

In the world of intellectual property trade secrets are a bit of a black sheep. They play a huge role in protecting a company, but unlike trademarks, copyrights, and patents there’s not a formal process to secure trade secrets.

What is a Trade Secret?

The term “trade secrets” can apply to a wide variety of issues. Generally speaking a trade secret is information that gives a company a competitive advantage and is reasonably protected from public access.

Perhaps the most famous trade secret is the Coca-Cola formula. This top secret set of instructions to make the fizzy concoction clearly gives an advantage because it can’t be duplicated and it’s kept under close lock and key.

Formulas aren’t the only thing protected by trade secrets, the following are also protected:

  • Survey methods
  • Patent pending inventions
  • Business practices and strategies
  • Algorithms
  • Techniques

How To Protect Trade Secrets

In order for information to be considered a trade secret, it needs to be treated as a secret. This means certain precautions must be taken. If trade secrets are ever compromised, the court will want to know what you did to keep the information a secret. Some questions the court might ask are:

  • Did you keep files in a locked cabinet in a locked room?
  • Did third party contractors and employees sign non-disclosure agreements?
  • Did you clearly define what information qualifies as a trade secret and communicate that to your employees?
  • Did you exclude pertinent information from legal filings?

What Protection is Offered with Trade Secrets?

Once you’ve properly established information as a trade secret no one can use, copy, or sell it without your permission. People who steal the secret, get the secret from someone else who stole it, or even accidentally discover the secret are not legally allowed to use the information. However, if someone analyzes public information and is able to crack the code, they can legally use it.

There’s some grey area when it comes to trade secrets. If you need help knowing what’s black and what’s white, call the Arizona trade secrets lawyer at Parsons & Goltry.

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