Trade Secrets Intellectual Property: Everything You Need to Know
Trade secrets intellectual property doesn’t receive a lot of attention. In fact, most assume that the types of IP rights are patents, copyright, and trademarks.3 min read
Trade secrets intellectual property is a type of intellectual property (IP) that doesn’t receive a lot of attention. In fact, most people assume that the most common types of intellectual property rights are patents, copyright, and trademarks. However, trade secrets are actually the most common type of IP right.
The reason that people don’t think too much about trade secrets is because secrecy doesn’t involve any type of government process or application. For example, those obtaining patent protection must submit a formal application to the U.S. Patent and Trademark Office. Those seeking trademark protection must also submit a formal application before obtaining such protection. However, trade secrets are more of a contractual concept entered into between businesses with no other government or regulatory oversight.
Another reason that trade secrets aren’t the most well-known IP right is because there is no specific rule or regulation that enforces trade secrets. Lastly, secrecy disputes aren’t heard about in the news. That’s because trade secrets are so private and confidential that only certain executives from each business know about the trade secret in the first place. When a dispute arises, the businesses lawyers are the only parties that become privy to such information.
Trade Secret: An Overview
Any confidential business information that provides some sort of competitive edge over other similar businesses could be considered a trade secret. Such secrets could be manufacturing, industrial, or commercial secrets. And the unauthorized use of that confidential information is an unfair practice, thus a violation of that trade secret.
Other types of secrets can include:
- Sales methods
- Distribution methods
- Consumer profiles
- Advertising methods
- Supplier/client lists
- Manufacturing processes
However, keep in mind that such confidential information will really depend on the facts regarding that specific case, the parties involved, and how the information was taken. For example, someone who was formerly employed by Coca-Cola but leaves the company to work for Pepsi likely has inside information regarding Coca-Cola’s processing, advertising, manufacturing, and clients. Therefore, any information disclosed regarding Coca-Cola is likely a violation.
That’s why the concept of trust is crucial when it comes to trade secrets. Before the industrial industry became big, most businesses were much smaller in size and were comprised of family members. However, as such companies grew in size and number of employees, the companies had to ensure that all employees signed contracts promising not to disclose such company secrets.
While trade secrets aren’t an exclusive right like patents, the unlawful acquiring or misuse of a trade secret that is done via a breach of confidence or theft is, in fact, legally actionable. Therefore, the victim of the theft could sue and earn additional compensation or an injunction for the unlawful acts.
Due to the ever-increasing expansion of the Internet and ability to steal data from computers, cyber espionage is a significant risk that companies take when storing confidential information on their computers. Tracing such espionage can be rather difficult too. What’s more, businesses might not even realize that their information was compromised. While this program is growing, governments are continuing to look for solutions to this problem.
Not only are businesses at risk of having their secrets stolen, but they are also at risk of having secrets of other companies put on their databases. For example, a former employee of Coca-Cola who now works for Pepsi might unlawfully store secrets from Coca-Cola on Pepsi’s database without the company knowing. This means that Pepsi could be sued by Coca-Cola not even realizing that it has Coca-Cola’s trade secrets on its databases.
Some trade secrets, particularly processes and methods, ultimately become patent protected. Since most patents require “absolute novelty,” the invention must be entirely protected from public disclosure before filing for patent protection. With that said, after filing a provisional patent application, the patent holder will have a period of one year to refine and enhance the invention. During this time, the business can indicate that the invention is patent pending, and therefore, no other person or business can steal that creation.
If you need help learning more about trade secrets, or you need legal help drafting a trade secret agreement, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5-percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.