What Are Trade Secrets and How Are They Protected?
- March 22, 2021
Everyone has secrets, things we keep to ourselves or only entrust to our closest confidantes. It’s natural to want to have some confidential information you only share with a trusted few who know the importance of secret protection. Secrets come in respect to all levels of importance. Whether it’s the way you fold your socks or the fact that you dislike mayonnaise on sandwiches, you want to know that if you share confidential information with someone, it will be kept safely under wraps.
The same is true for trade secrets, like patents or other important secrets held by businesses. Trade secrets are confidential as they generally have a great deal of economic value. Misappropriation of trade secrets is a very serious problem for businesses of all sizes, both nationally and globally. Every business, just like any individual, needs to count on the secrecy of their highest-valued information being kept by those with knowledge of the trade secret. Therefore, when trade secrets or other secret information that belongs to a United States business is subject to misappropriation, it often leads to litigation in a United States court of law.
What is a trade secret, anyway?
There are plenty of famous examples of trade secrets in the records of the United States Patent and Trademark Office. The exact design of Nike’s trademark “swoosh,” as well as the font used in the New York Times logo is patented. Any misappropriation of the Nike “swoosh” or the New York Times font is illegal. In other words, the use of the logo or that font on your blog is prohibited. Furthermore, it is restricted to emblazon a sweatshirt with Nike’s patent-protected logo or New York Time’s font.
Although both are important assets to any business, a Trade Secret differs from a Trademark as It acts more like a compilation of information that isn’t officially under patent or trademark but gives a business a competitive advantage. Common examples include customer lists or recipes. Using recipes, such as the recipe for Famous Amos cookies, is illegal. While that may seem like a small offense, it’s considered a trade secret violation, and the legal system takes the misappropriation of trade secrets very seriously.
If you run a small business, you have likely had a few trade secrets of your own. If that is the case, you should be taking reasonable measures to keep secret information of economic value to your company safe and secure. If you own intellectual property, you should be using the proper means to maintain utmost secrecy. You may not think of customer lists as trade secrets, but if your competitor obtained them through improper means, you would likely be upset.
Theft of Trade Secrets
Cybercriminals have increasingly been capable of intruding into protected hard drives and cloud storage. It doesn’t have to be a competitor, either. Just like any other theft, theft of trade secrets occurs because miscreants know that this secret information has economic value. It can be used for bribery, to gain an edge in an industry, or it can be sold to a competitor.
Best practices, when it comes to secret protection, include entering a non-disclosure agreement (NDA) with all who will have knowledge of the trade secret. It should be made clear that, barring exceptional circumstances, you-as the owner of the trade secret will not be shy about utilizing state law and even the Federal court system of the United States to hold miscreants accountable for their bad faith efforts. The use of the information should be prosecuted to the full extent of the law. Acquisition of a trade secret by way of a bad faith effort can and should be the subject of litigation, regardless of the type of information that was stolen.
Contact Global Legal Law Firm
If you’re able to patent the secret information in your possession, it’s a good idea to do so. However, it is not impossible to protect proprietary information within common law and state law, if you can prove that you’re making a reasonable effort (by way of an NDA) to keep your secrecy intact. Global Legal Law Firm can help. Contact us for your free 15-minute phone consultation.
Unlocking the Future of Finance: The Influence of Open Ecosystems and Tech Titans on Digital Payments
Exploring the Impact of Mobile Device Operating Systems on Financial Innovation In the ever-evolving...Read More
Balancing Convenience and Complexity in the Digital Age In today's digital age, financial institutions...Read More
How Open Banking, Tech Giants, and Mobile Devices are Shaping the Payments Landscape In...Read More