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How to Protect Your Trade Secrets

By John DiGiacomo

Many businesses choose to protect their valuable intellectual property assets through the use of trade secret protection. A trade secret is any valuable business information that derives its value from being kept secret. The trade secret information gives the company a competitive advantage in the marketplace. The trade secret information could be a secret practice, recipe, formula, customer list, commercial method, instrument, or just about anything that does not pose a risk of being easily reverse engineered once it is in the hands of consumers or competitors.  

What is Involved in Trade Secret Protection?

In order to invoke trade secret protection over valuable business information, all the company needs to do is take active steps towards keeping the information secret. This could involve  keeping the information out of the hands of typical employees and leaving access to the trade secret only to those who need to know it. A company could also implement protocols concerning how to handle trade secret information, such as keeping the trade secret information under lock and key or under password protection when it is not in use.

Trade secret information could also be labeled “protected,” “confidential,” or “top secret,” and only certain employees could be granted access to the trade secret information, i.e., only certain employees could have the appropriate level of clearance to access the information.

Another popular means for protecting trade secret information is the use of confidentiality agreements with employee, partners, vendors, and other third parties who have access to the trade secret information.

Related Reading: Third-Party Data Breaches: Weakest Link in Cybersecurity

What Happens When Trade Secret Information Falls into the Hands of a Competitor?

There are three main mechanisms by which trade secret information could be inadvertently divulged to the general public and thus trade secret protection could be lost:

Arriving at the Trade Secret Through Independent Research.

It is possible for a competitor to engage in independent research efforts and ultimately arrive at the trade secret information. When a trade secret is discovered by way of independent research, the competitor who figured out the trade secret through the independent research is legally allowed to use the trade secret information from that point forward.

Discovery of trade secret information through independent research is considered a legitimate means of coming by the trade secret information. Trade secret protection is lost when the trade secret is arrived at through independent research efforts.

Reverse Engineering of Trade Secret Information.

Trade secret information is often sold directly to consumers and as such, competitors could also legitimately purchase the trade secret information. Once the trade secret information is in the hands of the competitor, it is perfectly legal for the competitor to reason out the trade secret information by means of reverse engineering.

Reverse engineering is the process of looking at a product or method of doing business and experimentally or systematically trying to figure out what the secret is to that product’s or business method’s success. When trade secret information is ferreted out by reverse engineering, there is little that a company can do to prevent the competitor from using that trade secret information for their own gain. Reverse engineering is considered a legitimate means by which to come upon trade secret information.

Misappropriation of Trade Secret Information.

Misappropriation of trade secret information is the only time that a trade secret owner can seek legal recourse against the person or entity who misappropriated the trade secret information. Misappropriation can include stealing the trade secret information, inadvertently or improperly disclosing the trade secret information without authorization to do so, or acquiring the trade secret information by any other improper means.

Misappropriation of trade secret information often involves a breach of an employee confidentiality agreement, breach of a non-disclosure agreement, inducement of another to breach of confidentiality agreement, theft of the trade secret information, and corporate or industrial espionage.

Relief in Situations Where Trade Secret Information was Misappropriated

In situations in which trade secret information is misappropriated or stolen, it is possible to seek legal remedy from the courts over the misappropriation. It is common for victims of trade secret misappropriation to request:

  • Temporary restraining orders (i.e., short-term emergency relief that requires the competitor to not use the trade secret information until an evidentiary hearing on the matter of misappropriation can be held).
  • Preliminary injunction (i.e., a form or relief that prevents the competitor from using the trade secret information until a trial on the merits is held).
  • Other prophylactic relief to put a stop to the unauthorized use of the trade secret information immediately.

Additionally, victims of trade secret misappropriation also often petition the court for whatever damages are due to them from the unauthorized use of the trade secret information up to the time that the misappropriation claim is made (e.g., actual lost sales and the competitor’s unjust enrichment), as well as permanent injunctive relief to prevent the unauthorized use of the trade secret information in the future.

Which remedies make the most sense for any particular trade secret misappropriation case depend on the particular circumstances of the misappropriation. It is important to discuss your particular circumstances with an experienced New York trade secret attorney because each trade secret misappropriation case is unique.

When You are Concerned That Your Trade Secret has Been Misappropriated

If you are concerned that your trade secret information has been misappropriated in some way, it is important that you get in touch with an experienced trade secret attorney as soon as possible. The more quickly you discussed your situation with a trade secret lawyer the sooner you can move to put a stop to the misappropriation.

Your trade secret information and intellectual property rights need to be protected and defended against those who are out to misappropriate your valuable trade secret information. Please do not hesitate to contact the professionals at Revision Legal today by using the form on this page or calling us at 855-473-8474.

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