Trademark Secrets

Trade Secrets

Trade secret law represents a balance of two primary concerns — the encouragement of innovation and the enforcement of ethics in business. Under the Uniform Trade Secrets Act, which has been adopted by the vast majority of states, a trade secret is information that: derives independent economic value by virtue of not being generally known or readily ascertainable by others; and is the subject of efforts reasonable under the circumstances to maintain its secrecy.

Trade secret protection focuses on the nature and character of information and the precautions taken to ensure its protection, rather than the form in which it exists. Unlike other forms of intellectual property, virtually any subject matter of information can be a trade secret, as long as it is kept secret according to the general standards required for trade secret protection. Though trade secret owners are required to take affirmative steps to safeguard their proprietary information, the reasonableness of one's protective measures is considered in light of the particular circumstances. Every trade secret owner should tailor its measures to its needs and abilities.

The benefits of trade secret protection can be seen in a variety of situations. For example, in the workplace a trade secret protection program can ensure that employees past and present uphold their confidentiality obligations rather than sharing information with competitors. In dealing with third parties, protective measures such as confidentiality and non-disclosure agreements serve as deterrents against the theft of developing innovations. Conversely, parties benefit from being mindful of steps they can take to avoid having to defend against such claims. For example, some of the most common trade secret disputes arise where an employer hires a new employee formerly employed by a competitor who then sues, or where negotiations between businesses do not conclude in a new relationship subsequent to the disclosure of confidential information.

McHale | Slavin has extensive experience in advising clients as to the protection of trade secrets both within one's own business and with third parties. Contact us for additional information or to schedule a consultation.