Generally, trade secrets are valuable information that provides businesses with competitive edges over other businesses. Trade secret information may include:
- Formulas;
- Patterns;
- Compilations;
- Programs;
- Devices;
- Methods;
- Techniques; or
- Processes.
There are three elements of a trade secret, including:
- The information cannot be accessed by members of the public;
- In many situations, the employees of the business may not be able to access the trade secret;
- The information is economically beneficial to the owner, providing the owner with a significant advantage in the marketplace; and
- The information owner makes a reasonable effort to maintain its secrecy.
A trade secret is a subcategory of intellectual property. Other subcategories include:
A company that owns trade secrets may maintain its confidentiality by keeping those secrets locked away in a vault and only sharing them with many individuals as necessary. Trade secrets are also protected by monitoring access to the information.
Businesses will also likely respond with legal action if the secrecy of their trade secret is compromised. In some situations, businesses may refrain from patenting a trade secret so they do not have to reveal it to the public.
Can My Company Seek Protection for Trade Secrets Online?
Yes, a company can seek protection for its trade secrets online. Material that is on the internet is protected from trade secret crimes.
It is important to note that, to receive protection from misappropriation and misuse, the information must first qualify as a trade secret. Courts in every state will examine different factors when determining if something is a trade secret, including:
- The extent to which the information is known outside of the business;
- The number of people within the company that are aware of the information;
- What steps the employer has taken to keep the information secret;
- The amount of money and effort spent developing the secret information; and
- How easy it would be for an outside individual to learn or copy the secret.
What Are the Differences between Trade Secrets, Trademarks, and Patents?
Some laws and statutes govern the protection of the different categories of intellectual property. For example, federal statutes, such as the Lanham Act and the Patent Act, provide protection for trademarks and patents.
In addition, there are state laws that govern trademarks. A trademark is required to be registered with an agency, including:
- State;
- Federal;
- Foreign; and
- International.
Protections provided to copyrights are a matter of federal law. Copyright materials should be registered with the United States Copyright Office.
Copyright protections may be available for:
- Literary works;
- Visual artwork;
- Music;
- Song lyrics;
- Sound recordings;
- Computer programs;
- Movies;
- Photographs; and
- More.
Trademarks are not considered trade secrets because they are visible to the general public as website graphics and logos. Copyrighted material must also be protected because it is available to the public.
There are state and federal laws that are available to protect trade secrets. In the majority of states in the U.S., the Uniform Trade Secrets Act (UTSA) is enacted.
Theft or misappropriation of certain trade secrets may be a federal crime. When Congress passed the Defend Trade Secrets Act (DTSA) in 2016, it made pursuing a federal civil case for theft of a trade secret possible.
The DTSA creates a right to sue for theft of trade secrets in federal court. There is a three-year statute of limitations for these types of cases.
The remedies available for trade secret theft are similar to those found under state laws. Patents and trademarks are not kept secret from members of the public.
A trade secret, on the other hand, is not supposed to be revealed. This is why, in many cases, the owner of a trade secret does not seek a patent.
If an individual registers for a patent, they must reveal their trade secret. In many situations, it is advantageous for the trademark owner or patent owner to let as many individuals as possible know they own that specific trademark or patent.
In contrast, trade secrets are concealed from the public. That is because if the information becomes public, the owner of that trade secret may lose their competitive edge.
Another issue to consider related to protecting a trademark or a trade secret is that, in recent years, court decisions have made protecting patents more difficult. Due to this issue, more companies have become interested in protecting competitively advantageous information as a trade secret rather than as a patent.
Numerous exemptions apply to patents and trademarks that do not apply to trade secrets.
Do I Have Trade Secret Status?
Individuals may seek relief at any time if their trade secret has been exploited. The internet, however, has created many new ways in which a piece of information or a product may lose its status as a trade secret.
Some of the most common ways that things may lose their trade secret status include:
- If the company itself posts information on its website that details a new product;
- If this occurs, the company may no longer be able to protect information regarding a product’s design or features;
- Employees email confidential information to people outside of the company, either intentionally or accidentally;
- Once the information is sent out, it may no longer be a trade secret; and
- Companies’ websites are hacked into because of poor security, and information that was once classified is no longer secret.
How Long Do Trade Secrets Last?
A trade secret will last as long as it is kept secret. Therefore, a trade secret may last forever if no one ever discloses the secret and it is not publicly known.
It is important to place safeguards to defend the trade secret and show the court that the owner made a reasonable effort to protect that secret if another individual tries to violate those protection measures and reveal the trade secret.
What Remedies Are Available if Someone Stole My Trade Secrets?
The remedies for violations of online trade secrets and confidential information are, in general, similar to those remedies that are available for any other type of trade secret misappropriation, which may include:
Monetary damages, either punitive or compensatory;
Injunctive relief, to stop the individual from continuing to misappropriate the trade secrets; and
Attorney’s fees.
The assistance of a qualified lawyer may be needed in order to obtain the appropriate remedy for a trade secret violation.
Do I Need an Attorney for My Trade Secret Issue?
If another individual or entity is using or exploiting your trade secret, it is important to consult with an intellectual property lawyer. Your lawyer can help you preserve your rights and try to obtain the relief you deserve.
If you have a trade secret claim, you may be entitled to receive monetary damages or an injunction to stop the offender from further using your trade secret. If the individual or entity used unlawful means to obtain your trade secret, such as theft, they may also be subject to criminal penalties.
You should also consult an attorney if you are using someone else’s trade secret information. If you have been accused of stealing a trade secret, you should consult with a lawyer as soon as possible to evaluate any possible liability.
