Understanding Trade Secrets
Google’s search algorithm and Coca-Cola’s secret formula are examples of trade secrets. A trade secret is considered proprietary information. It consists of a company’s practices and processes for manufacturing their products and is not public knowledge.
Trade secrets give companies competitive advantages. Because of this, employees generally have to sign non-disclosure agreements stating that they will not share trade secrets with others. Trade secrets can cause a lot of damage to a company, so a person who purposely shares trade secrets with others could face legal ramifications.
Elements of Trade Secrets
A trade secret generally consists of three main elements:
- It must contain information.
- It must have economic value.
- It must be reasonably concealed from the public.
What Can Be Considered a Trade Secret?
Under the Defend Trade Secrets Act, which was enacted by the federal government, trade secrets consist of the following information:
Trade secret law has been developed at both the state and federal levels. Because of this, there is no consistent definition of what exactly entails a “trade secret.” However, the law protects a wide range of information that would not be protected under trademark or copyright law, including the following:
Why is Trade Secret Law Becoming More Popular?
It seems as though trade secret law has been increasingly popular in recent years, and for good reason. All companies use trade secrets and they want protection for them. In the age of hackers and scammers, anyone’s personal information and secrets can be stolen by others and distributed to millions of people in the blink of an eye.
Companies are reluctant to disclose proprietary information even to employees. Because of this, many require non-disclosure agreements with strict penalties.
Trade secret law also offers a wide range of protections. It can protect information that is intangible and difficult to patent, such as algorithms, correlations, systems, and methods.
Another thing to consider is that while applying for a copyright, trademark, or patent, the secret has to be disclosed. That, of course, is risky because if the application is denied, it’s no longer a secret. Anyone can steal that information and use it as their own. That’s why companies often rely on trade secret law to keep their information from becoming public.
Protecting Trade Secrets
Protection may come in several forms:
- Physical security. This may involve storing secret information in a secure environment, such as a safe or vault, and limiting access to certain individuals.
- Digital or network security. This includes passwords, firewalls, and access controls.
- Legal measures. This often comprises documents such as non-compete, non-disclosure, and confidentiality agreements.
Contact a Bradenton Business Litigation Lawyer Today
Trade secrets are a huge part of a company. When someone gets a hold of them, it can cause a lot of financial damage.
The Bradenton business litigation attorney at The Cahall Law Firm can help you protect what’s important to your company. If your trade secrets have been stolen by an individual or company, make sure you understand your options. Call (941) 281-2019 or fill out the online form to schedule a free confidential consultation.