TRADE SECRET LAW

Some intellectual property can be protected as a trade secret.  A trade secret is defined as a secret formula, pattern, compilation of information, plan, process, tool, mechanism, and/or compound, which is known only to its owner and employees to whom it has been necessary to confide, which gives the owner and/or his or her company an opportunity to obtain an advantage over competitors who do not know the secret or how to use it. 

Trade secrets are generally protected through employee agreements and confidentiality obligations.  For example, if a company develops a process or a formula, such company may keep that process or formula from being used by competitors by obtaining agreements from employees and vendors not to disclose the process or formula to persons outside individuals who have an actual “need to know” within the company.   In simpler terms, the company may require employees to sign contracts promising to refrain from disclosing the trade secret.  Employees who violate such agreements may be subject to litigation.

Trade secrets are not required to be registered or filed with state or federal government agencies. Trade secrets may last forever and they never expire.   What is required is that the owner of a trade secret takes demonstrable steps, through policies, practices, and employee agreements, to keep the trade secret confidential.   

Some examples of trade secrets are:  accounting formulas, recipes, manufacturing processes, management techniques, and compilations of information.

A key difference between patent protection and trade secret protection is that patent protection requires the protected information become available to the public (through publication of the patent application and/or patent), whereas trade secret protection requires the protected information be kept secret.  If you patent a trade secret, once the application or patent is published, the information is no longer considered a trade secret and will no longer be protected by trade secret laws.

It can be difficult to choose between seeking patent protection and retaining a trade secret as a secret.  One thing to consider is that the law of trade secrets does not prohibit “reverse engineering” of a product.  Reverse engineering means that the end product is analyzed to determine how it was made or discovering the way to make the product through trial and error.

At James Ray & Associates our staff is prepared to consult with you regarding how to best protect your ideas, inventions, trade secrets, etc.

For more information on how we can help to protect your trade secrets and other intellectual property, contact James Ray & Associates toll free at (888) 692-7303 to speak with an experienced member of our staff today.