Trade Secret?

Presented by:Muhammad Talha Tahir

Bese 22 C
Submitted to: TVF Sir Ismatullah
Other Forms of Intellectual Property (We’ll Get to
Trade Secrets on the Next Slide)

 A Trademark is anything that identifies and distinguishes the

source of the goods or services of one party from those of
others.

 A Patent for an invention is the grant of a property right to

the
inventor.

 Copyright protects original works of authorship, including

literary, dramatic, musical, and artistic works. Copyright law
protects the form of expression - the underlying ideas are
not copyrightable.
OK, So What’s a Trade Secret?

 A Trade Secret is a piece of information, not generally known

or reasonably ascertainable, that gives a business an
economic advantage over its competitors.

 Trade Secret protection requires reasonable efforts to maintain

secrecy.

 Some of the most famous Trade Secrets include:

 Recipes (Coca-Cola)
 Formulas (WD-40)
 Algorithms (Google Search)
 For most businesses – may include customer lists, internal specs
and best practices guides.
 “Negative” Trade
Secrets
 Negative information regarding your company can also be
trade secrets, including:
 Abandoned solutions
 Research dead-ends
 Unsuccessful sales efforts

 This info could help your competitors by letting them know

what not to do – giving them a head start
 How Long Do Trade Secrets
Last?
 Potentially forever - if the information continues to meet the
qualifications (remember: a piece of information, not
generally known or reasonably ascertainable, that gives a
business an economic advantage over its competitors), and
it’s not revealed, it remains a trade secret.

 This indefinite life span means that trade secrets can be

very valuable assets for your company.

 However: rights in a Trade Secret only exist as long as the

secret is maintained.
 If you broadcast it to the world, you’re out of luck.
 Legal Protection for Trade
Secrets
 Trade Secrets are governed in the U.S. by State and Federal
Laws including the Uniform Trade Secrets Act (adopted by
most states in various forms.)

 Misappropriation by Improper Means is punishable:

 May include theft, bribery, misrepresentation, breach of duty to
maintain secrecy, or espionage

 In 2016, Congress passed the Defend Trade Secrets

Act, creating a Federal right of action for Trade Secret
Misappropriation.

 However: you can’t prevent others from independently

discovering or reverse engineering your trade secrets.
How Do I File a Trade Secret?

 You don’t! There is no way to file or register something as a

trade secret.

 Whether something is entitled to trade secret protection

is determined by how you treat that piece of information.
 How to Protect Trade
Secrets
 Employ multiple means of security

 Physical security for docs & prototypes

 Best Practices: Don’t talk about or publicize

your trade secrets

 Contract: Confidentiality or “Non-Disclosure”

Agreements
 For employees and 3rd parties
 Common Trade
Secret Security
Procedures
 Restricting access to “need to know” individuals

 Marking docs or security areas “Proprietary and Confidential”

 Keeping info under lock and key or imposing password

protection
 Monitoring access to info through log-in procedures sign-in
& sheets

 Shredding or destroying copies

 Exit interviews and agreements for departing

employees
 The Inevitable Disclosure
Doctrine
 Courts may prevent former employees from working for a
competitor when disclosure of trade secrets would be
inevitable
 Factors considered include whether:
 The new employer is a direct competitor
 The new position is nearly identical to the old one, such that the
employee could not reasonably be expected to fulfill the new job
responsibilities without utilizing trade secrets of former employer
 The trade secrets at issue are highly valuable to both the former and
the new employer

 Warning: Don’t rely on this approach– not all states &

jurisdictions have adopted this doctrine. This is a last resort!
 What Happens When a
Trade Secret is Breached?
 Legal remedies available may include:
 Monetary damages
 Injunctive relief (temporary restraining order) – preventing imminent
disclosure
 Accounting for profits
 Destruction of wrongfully made goods

 Catch-22: Legal enforcement may require disclosure of

the trade secret
 Courts may impose a “protective order” to prevent the general public
gaining this information
 Trade Secret
Licensing
 The owner may grant a license to another party to use the
secret info
 Licenses may be exclusive or non-exclusive

 Make sure that the contract terms are strongly worded and
clear
 Contract must restrict disclosure of trade secret and indicate what
happens in the case of a breach
 Think through the various possibilities before drafting or signing a
Trade Secret Licensing Agreement