A trade secret consists of information that is used in business, which gives the owner of that trade secret a competitive advantage over others in the same field. The misappropriation of trade secrets is prohibited.
Elements of a Trade Secret
? That has economic value due to the fact it is a secret, and which is
? Not known by either the general public or competitors, and is
? Reasonably treated as secret by the owner.
Types of Information
Typically, information must be either:
? Technical or
Examples of technical information include such things as formulas, processes, techniques, patterns and methods. Business information goes more to such issues as pricing, marketing, manufacturing, personnel and mergers.
Reasonable Treatment as a Trade Secret
The owner of a trade secret may wish to keep it secret and intend to do so, but that is insufficient; he or she must make reasonable attempts to maintain that secrecy. Reasonable attempts, at the minimum, include putting all those who have access to the trade secret on notice that the information is in fact a trade secret and that disclosure is prohibited. It is desirable to place these terms in contractual form, for instance, in employment agreements.
Misappropriation involves three considerations:
? Wrongful acquisition
? Wrongful use
? Wrongful disclosure
A primary issue in each is whether the individual knew or should have known the information was a trade secret.
The Extent of Protection
Unlike patents or copyrights, trade secrets have no established protection period. Once revealed, there is no protection and independent research and innovation can provide competitors with the very same information.