We offer the following trade secret related services:
-representation of trade secret owners and parties accused of trade secret misappropriation in litigation and arbitration;
-draft and negotiation of trade secret related agreements (non-disclosure, license and etc.);
-review of clients’ trade secret protection mechanisms and advise on the best practices.
Frequently asked questions about trade secrets:
What is a trade secret?
A trade secret is information that:
• can be used by a business,
• is valuable,
• is secret, and
• confers an actual or potential economic advantage over others.
What kinds of things can be trade secrets?
• Scientific and technical information
• Customer lists and information about customers
• Supplier information
• Price and cost information
• Business methods
• Manufacturing methods
• Computer code and algorithms
• Marketing plans
• New product plans
• “Negative know-how” – information about what doesn’t work (“blind alleys”)
What makes something a “secret”?
Information isn’t necessarily a “secret” just because a company would like to prevent others from using it. Some things are considered too simple or obvious to merit trade secret protection.
Courts will look at the following factors to determine whether information is a trade secret:
• The extent to which the information is known outside the owner’s business
• The extent to which the information is known by employees and others involved in the owner’s business
• The measures undertaken by the owner to protect the secrecy of the information
• The value of the information to the owner
• The amount of time, effort, or money spent by the owner to acquire or develop the information
• The ease or difficulty with which the information could be properly acquired or duplicated by others
How can I protect my company’s trade secrets?
The owner of a trade secret must guard its secrecy using reasonable efforts.
So what are “reasonable efforts”?
The more efforts a trade secret owner takes to protect information, the more likely a court is to protect that information from unauthorized disclosure or use by others.
Following are some of the types of precautions that courts have deemed adequate to protect trade secret information:
• Requiring employees to sign employment agreements and/or NDAs forbidding their misuse of company trade secrets
• Including information about the use and misuse of trade secrets in employee handbooks and training
• Reminding employees of their confidentiality obligations during exit interviews
• Ensuring that employees return (or destroy copies of) any trade secret information when they leave the company
• Restricting physical and electronic access to trade secrets on a “need to know” basis
• Providing physical safeguards such as locked rooms and cabinets
• Protecting electronic files using passwords and encryption
• Marking documents, filing cabinets, and document storage areas with notices that the information contained within is proprietary and confidential
• Disposing of documents via shredding or comparable means of destruction
What are “proper means”?
Under the Uniform Trade Secrets Act (UTSA) a trade secret will lose its legal protection if it is disclosed by the owner or is ascertained by others using proper means.
“Proper means” include:
• discovery by independent invention;
• discovery by reverse engineering when acquisition of the product to be reverse engineered is obtained by fair and honest means;
• discovery under a license from the owner of the trade secret; or
• observation of the item in public use or on public display.
Often NDAs will expressly state that information discovered or revealed in any of these ways is no longer “confidential” and thus not covered by the NDA.
How long does trade secret protection last?
In theory, trade secret protection can last “forever.” It doesn’t automatically expire after a period of years as patents and copyrights do.
Probably the most famous trade secret in the world is the recipe for Coca Cola. Coke was invented in 1886 and the formula was kept a closely guarded secret. From 1925 until 2011 it was kept at the Trust Company Bank (now SunTrust) in Atlanta. Recently, The Vault of the Secret Formula became the centerpiece of the “World of Coca-Cola” exhibit.
If you have questions about trade secrets, or want us to review your company’s NDAs and trade secret protection program, please contact us at 1 (310) 46103776.