3 keys to establishing a trade secret

| Sep 3, 2020 | Trade Secrets

With a patent, the person or company that holds the patent has to file information that ultimately becomes public knowledge. This is important since people need to know what patented inventions or processes they are not allowed to use without permission.

A trade secret, however, is much different. It is not public knowledge. The whole idea is that only the company knows that secret and they attempt to protect it from theft. They may even go so far as ensuring that almost no one within the company even knows what the secret is.

To set something up as a legal trade secret, there are three main keys:

  1. The company that holds the secret is obligated to at least attempt to keep the information private, making a reasonable effort to do so.
  2. There has to be an economic value to that secret. For instance, if the secret is the recipe for a food product that the company sells, the economic value is that no one else can claim to make exactly the same product.
  3. The trade secret itself has to contain information. It is this information, which is well-defined, that the company does not want to fall into the wrong hands.

Intellectual property theft often involves trade secrets. The economic damage can be great because the secret may allow the company to have the largest market share, so stealing that information and making an identical product is alluring to those who are willing to bend the rules to do so. If this happens, those who have the secret need to know what legal options they have to protect it — and what they can do if someone tries to steal their proprietary information.