Protection of Trade Secrets

Protection of Trade Secrets

In industry, it is generally recognized that one’s livelihood may be at least partially derived from certain information or processes unique to that business. This has led to a desire to protect these “trade secrets”, so inappropriate use or outright theft of the intellectual property cannot be used by a competitor. Protection of trade secrets is covered under tort law, which provides a legal avenue for compensation to the injured party.

The Uniform Trade Secrets Act was originally published by the Uniform Law Commission in 1979, in an effort to provide a framework for a uniform set of regulations pertaining to trade secrets in industry.  Prior to the widespread adoption of the UTSA, protection of trade secrets fell under common law in individual states. With the exceptions of Texas, Massachusetts, and New York, forty-seven states and the District of the Columbia have now passed regulations based upon the UTSA model. This provides greater consistency, and therefore better legal protection, from one state to another.

The UTSA defines a trade secret by several qualifying factors. A trade secret can be any type of information such as formulas, techniques, patterns, devices, programs, methods, or processes, which has economic value stemming from the fact that it is not generally known by other persons who may profit from using or knowing it. The person or industry which claims to own the trade secret must have made reasonable efforts to protect its secrecy. It does not matter whether the information has real economic value or only potential value. Both are protected under the UTSA.

In order for a trade secrets claim to qualify under UTSA guidelines, the subject matter in question must first qualify as a trade secret by this definition. The owner of the information must also prove that reasonable measures were taken to protect it, and that the offending party wrongfully acquired the information. This last qualification is very important. There are basically two situations which qualify for the wrongful acquisition of a trade secret: a breach of confidence or improper means of gaining the information.

There are many lawful ways in which a competitor may acquire a trade secret and use it to their own advantage, such as reverse engineering or independent discovery. If it can be proven that the trade secret owner did not take reasonable measure to protect the information, then the original owner will probably not succeed in making a claim.

Your business may have more intellectual property than you think and this is one area of the law where the team at Bethel Law Corporation truly excels.  Contact us today to discuss your situation and make sure you have the necessary protection.

Leave a Reply

Your email address will not be published. Required fields are marked *