American companies routinely face stiff competition on the domestic and international front. Most companies welcome free and fair competition, but increasingly they are being victimized by those who would steal confidential information that is critical to these companies’ ability to grow their business, increase jobs and compete globally.
What is a trade secret? There are three key elements to a trade secret, including: 1) it includes information that has actual or potential economic value by virtue of its not being generally known; 2) it has value to others who cannot legitimately obtain the information; and 3) the company has taken reasonable measures to protect the information from being made public.
What are examples of trade secrets? Trade secrets cover such items as formulas, developmental processes, product designs, customer lists, marketing data, and more. This information is deemed “classified” by the company. Trade secrets cover items that may not be eligible for patent or trademark protection, but they provide economic benefits because of their uniqueness to the company.
For example, a company cannot patent a specific carbonated beverage, but it can protect the beverage’s recipe, which is unique to the company, as a trade secret. While patents can protect an invention only for a certain period of time, trade secrets can endure for as long as they remain protected.
Numerous federal laws have been enacted to protect U.S. companies’ trade secrets, the most recent of which is the 2016 Defend Trade Secrets Act (DTSA). Under that law, Congress provided additional tools to companies that are trying to protect their trade secrets. The law essentially classifies trade secrets as a type of federally protected intellectual property (IP), alongside patents, trademarks and copyrights. A key provision allows companies whose secrets have been illegally obtained to take their competitors to court and seek civil remedies. The unique provision in the law does not supersede existing state laws, thus allowing companies to choose between state and federal courts when seeking damages. Additional federal laws make parties found guilty of stealing trade secrets subject to substantial fines and even imprisonment.
IP law is highly detailed and complex. The amount of IP litigation seemingly increases exponentially each year. American businesses of all sizes are constantly thinking about how to protect their confidential information, their technology and their most valuable processes.
If your company’s trade secrets are under attack, you’ll want to make sure you have a professional who can defend your interests in state or federal court, like a trade secret lawyer.