Every business has intellectual property (IP) that requires protection, such as inventions, designs, artistic works, images, or names. Trade secrets are one of the ways that businesses can protect their intellectual property from public access. Since trade secrets are unknown to other individuals or businesses, they give companies a competitive advantage.
Unlike other intellectual property protection strategies, trade secrets are not registered with the government. Trade secrets are usually documented secretly and notarized by intellectual property lawyers. The owner of the trade secret is responsible for keeping their unique idea out of the public domain. This means that if the trade secret is leaked, the owner cannot sue other people for using it.
Why Trade Secrets as a Form of Intellectual Property Protection
Protecting intellectual property under trade secret law can be a strategic option for many businesses. In some situations, trade secret protection for intellectual property can be a more accessible alternative to options like patents, copyrights, and trademarks. Additionally, trade secrets do not have any limitations or expiration dates. This means that trade secrets have an immediate effect and can provide the required protections as long as the information is kept secret.
Trade secrets may comprise technical information, commercial information, or a combination. Some popular, closely guarded trade secrets include recipes, manufacturing processes, advertising strategies, and software algorithms.
Trade secret protection does not require regulatory formalities like disclosing information to government authorities. However, your information must meet certain criteria to be considered a trade secret. Generally, the information must hold commercial value, and you must take reasonable measures to keep it confidential. To maintain their protected status, you must ensure continuous due diligence of your trade secrets.
How to Protect Your Trade Secrets
Since trade secrets are not registered with the government, it is your responsibility as an intellectual property owner to keep your property a secret. You must do everything possible to ensure that your secret never gets to the public domain. Measures you can take include:
- Restricting the number of individuals who know the secret
- Ensuring all people who know the secret sign nondisclosure or confidentiality agreements
- Including confidentiality clauses in employment agreements
- Securing all physical copies of valuable company information
- Using password protection and encryption to limit access to business data
Despite the best efforts of business leaders, trade secrets can occasionally leak to the public. This public revelation can come in different forms, such as by theft, through licensees and employees, and by the failure of the business to implement secrecy measures.
When your secret becomes public knowledge, you lose your intellectual property protection. You can sue and even win damages from the person who leaked the information. However, other people are free to use your idea without consequences. Therefore, it is in your best interest as an intellectual property owner to keep your information private for as long as possible.
In Summary
Trade secrets may provide an alternative to patent law when the business information can be kept secret. Furthermore, trade secret protection tends to last as long as you keep the information private, while patent protection expires after a maximum of 20 years. For businesses to maintain the confidentiality of trade secrets, they must have a solid plan and ensure that everyone sticks to it. If you have questions about formalizing, protecting, or legally enforcing your intellectual property rights, be sure to consult with an experienced attorney