A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers.
The precise language by which a trade secret is defined varies by jurisdiction (as do the particular types of information that are subject to trade secret protection). However, there are three factors that, although subject to differing interpretations, are common to all such definitions: a trade secret is information that:
- is not generally known to the public;
- confers some sort of economic benefit on its holder (where this benefit must derive specifically from its not being generally known, not just from the value of the information itself);
- and is the subject of reasonable efforts to maintain its secrecy.
While many forms of intellectual property require some affirmative act of registering or applying for protection of the property with a governmental agency (e.g., trademark registration with the United States Patent and Trademark Office, copyright registration with the United States Copyright Office, etc.), trade secrets are by definition not disclosed to the world at large. Instead, owners of trade secrets seek to protect trade secret information from competitors by instituting special procedures for handling it, as well as technological and legal security measures.
More intellectual property is protected by trade secret protections than by any other means. A specific example is a proprietary formula or source code, in the case of software. However, in order for trade secret law to effectively protect the property, affirmative steps must be taken by the trade secret owner.
At Szaferman Lakind, our attorneys understand the value of trade secrets and how to effectively protect them. With the appropriate measures in place, even when there is a disclosure of the trade secret – for example, by unauthorized access or by theft by a former employee – legal and equitable remedies are available to the owner of the intellectual property, provided that the proper measures were initially taken to keep the trade secret a secret.