The term intellectual property, or IP, refers to broad property rights vested in the intangible. The property rights associated with real property, such as land, personal property, or everything else, are relatively straightforward.
Owners of these types of property have the right to possess it, prevent other people from possessing it, and preserve its integrity. This forms the basis of laws against:
- Theft;
- Trespass; and
- Vandalism.
Intellectual property law embraces copyright laws, patent laws, and trademark laws. Working with an intellectual property lawyer can help an individual shield their work and provide them peace of mind that their work will not be copied or used by another without giving them compensation.
What Is a Copyright?
If an individual is a visual artist, musician, or writer, copyright laws defend their creative works. Copyright law stops others from using or stealing an individual’s work for profit of their own.
Who Should Be Concerned About Intellectual Property Issues?
Almost everyone should be concerned about intellectual property matters. There are, nevertheless, certain people who should be mainly concerned, including:
- Creative employees, or employees whose job descriptions require them to make new creative works, such as writers, graphic designers, etc.: These people should be aware that, in general, their employer owns the copyright on any works they produce in the scope of their employment. This rule does not apply to independent contractors. Nevertheless, it is always advisable for an independent contractor and those employing them to prepare an agreement about who will own the IP rights in the work the contractor was hired to create to avoid disputes in the future;
- Employees in high-tech industries: Considerable lawsuits have begun when an engineer moves from one company to another and ends up taking trade secrets with them; and
- Employers: There may be some confusion about who owns creative work when produced in the course of employment. Employers who desire to maintain the intellectual property rights to works that their workers create in their scope of employment should be aware of these problems.
What Is a Trade Secret?
A trade secret is a form of intellectual property. It is defined as any information, process, formula, technique, or method that is not readily known by the public and provides an economic benefit to its holder. This makes it distinct from other forms of intellectual property, such as copyrights and trademarks, where the subject matter must be in an easily visible and tangible form, rather than just an idea or piece of information. For information to maintain its status as a trade secret, the holder must make reasonable efforts to keep the information’s confidentiality.
Unlike other types of intellectual property, one does not register their trade secrets with a government agency. Rather, trade secret protection is typically secured through contracts, non-disclosure agreements, and non-compete forms. These documents and agreements provide guidelines for individuals exposed to the trade secrets that stop them from sharing that information with anyone who may share the information with its competitors.
What Are the Differences Among Trade Secrets, Trademarks, and Patents?
Different statutes cover the sources of intellectual property. Federal statutes (namely, the Lanham Act and the Patent Act) protect trademarks and patents. For the most part, state law protects trade secrets, and most states have enacted the Uniform Trade Secrets Act (UTSA). Nevertheless, the theft or misappropriation of some trade secrets is a federal crime.
Furthermore, trademarks and patents are not kept secret from the public. On the other hand, trade secrets are concealed from the public because if the information becomes public, the trade secret holder will lose its economic edge.
Finally, trademarks and patents are subject to several legal exemptions that do not apply to trade secrets. People can usually make satire or parody trademarks; such parodies and satires are usually speech protected by the First Amendment. Furthermore, patents typically expire after twenty years, while trade secrets can extend indefinitely.
How Do Businesses Protect Their Trade Secrets?
Companies can legally protect their trade secrets by adding specific terms to employment contracts. Non-Disclosure Agreements (NDA) are the most direct protection. An NDA requires employees to keep company information confidential. Companies can also use Non-Compete Covenants to prevent ex-employees from revealing trade secrets to competitors.
Companies can also develop policies and procedures for employees using the trade secret and communications regarding the trade secret. Companies can address these policies in training or orientations as soon as the employee is hired. The company should convey its intent to preserve the confidentiality of the trade secret.
How Long Do Trade Secrets Last?
Trade secrets last as long as they are kept secret. Thus, if no one ever discloses them and they are not publicly known, trade secrets can last forever. It is recommended to put safeguards in place to defend the trade secret and show the court that you made a reasonable effort to protect it if another individual tries to violate your protection measure and reveal your trade secret.
How Do You Terminate a Trade Secret?
Information can lose its protected status as a trade secret if it becomes public knowledge. If the knowledge is readily accessible to individuals who could commercially exploit it, it can no longer be claimed as a trade secret.
Can Any Disclosure Terminate a Trade Secret?
No, disclosure terminates trade secret protection only if the information becomes generally known or readily ascertainable. Some types of disclosures that will not terminate trade secret protection are:
- Disclosure to employees
- Disclosure to suppliers
- Disclosure to people who want to license your product
As long as the individual you disclose to is under some obligation not to disclose trade secret information to others, and as long as they respect that duty, disclosing trade secret information will not terminate the protection.
When Does Disclosure Terminate a Trade Secret?
Disclosure will terminate a trade secret when it makes the information publicly available. It does not matter if the disclosure was intended or incidental. It does not matter if the trade secret owner took all reasonable precautions to protect the information. What matters is whether or not the information is made generally known.
This can happen in several different ways:
- The trade secret owner can intentionally terminate the trade secret by publishing the information or by selling a product that makes the information clear
- Someone else who learned of the information can disclose it
Is Disclosure the Only Way to Terminate a Trade Secret?
Disclosure is not the only way to terminate a trade secret. A trade secret is terminated any time the protected information becomes available to the public. For instance:
If someone develops the information independent of the trade secret owner
If a person reverse engineers a product to find out how it was created (in other words, purchases a product legally, takes it apart, and figures out how to make the product as a result of taking it apart)
Difficulties Surrounding Trade Secret Lawsuits
Most trade secret lawsuits are between the alleged holder of a trade secret and its competitor(s) or former employee(s). In lawsuits against competitors, they will often claim that they created the trade secret first. For this reason, companies need to maintain a record of the dates of when they created their trade secrets.
Do I Need to Talk to a Lawyer About Protecting My Trade Secret?
Trade secrets are essential for the operation of many business endeavors, and losing a trade secret can seriously damage a company. If you have questions or concerns regarding the security of your trade secret, you may want to consult with an intellectual property lawyer. They can help you take the appropriate steps to protect your trade secret.
