Protecting Your Trade Secrets

Protecting Your Trade Secrets

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Legally, it has a definition in the law. Most states in the United States have  adopted some form of the Uniform Trade Secret Act. Under the Uniform Trade Secret Act a trade secret has three basic characteristics. Number one, it is a secret. Secondly, it confers a competitive advantage on its owner. And thirdly, it is the subject of reasonable efforts, to maintain its secrecy. So three things, it’s secret. It contains an advantage to your business and it is subject to the maintenance of secrecy. And that is essentially the lay persons and the legal definition of a trade secret.

Welcome to Trade Secret Law Radio, we bring you the best in trade secret news, legal advice and information.  From trade secret misappropriation to trade secret agreement drafting and negotiation, we cover the issues here.

Matt: Hi and welcome back to Trade Secret Law Radio. I’m Matt Plessner and today attorney at Law Mark Clark join us from the Trevor Legal Office in Trevor City, Michigan to talk to us about how to protect trade secret.

Mark, thank you for joining us today.

Mark: You’re welcome, Matt. Thank you.

Matt: Now Mark, to start us out, can you tell us what a trade secret is?

Mark Clark

Well, Matt. In  layman’s terms, a trade secret is something of value to your business that you do not want your competitors to know about.

Legally, it has a definition in the law. Most states in the United States have  adopted some form of the Uniform Trade Secret Act. Under the Uniform Trade Secret Act a trade secret has three basic characteristics. Number one, it is a secret. Secondly, it confers a competitive advantage on its owner. And thirdly, it is the subject of reasonable efforts, to maintain its secrecy. So three things, it’s secret. It contains an advantage to your business and it is subject to the maintenance of secrecy. And that is essentially the lay persons and the legal definition of a trade secret.

Matt: Now Mark, how do I protect a trade secret?

Mark: Trade secrets are protected in several ways. First and foremost, the practical way to maintain a trade secret is simply to keep it secret. In other words, take all reasonable practical precautions to make your trade secret information, secret. Put pass codes on files, for instance, computer information and so forth, that are only accessible to a privileged few in your organization, that should be entitled to access  to the trade secrets. The other way that a business can protect a trade secret, is by virtue of a trade secret agreement, and usually those are incorporated into an employee handbook or a non-compete agreement.

Let’s talk about the different types of trade secrets. Trade secrets may be a secret formula. A trade secret can be a design, a supplier list, a customer list, financial data, personnel information, computer software. It could be a recipe for your bakery goods, or a recipe for your beer in your brewery business. Those types of things are trade secrets. And in order to protect your trade secrets, of course, there are the practical issues we talked about, in terms of keeping them a secret as you possibly can internally. But as an extra measure of legal protection, you normally have employees acknowledge the existence and the secrecy of trade secrets, in a trade secret agreement. Normally, an employee who signs a non-compete agreement, which contains trade secret provisions for instance, or has an employee handbook, which they sign for and acknowledge of certain trade secrets provide for certain penalties upon disclosure. An injunctive relief, which is an order from the court against further disclosure of trade secrets in the event of a leak. We often, for our clients, engage in the drafting of either employee manuals or trade secret provisions in various employment or non-compete agreements as an extra measure of protection for a business’ trade secrets.

Matt: Well, Mark, I want to thank you once again for joining us today.

Mark: Thanks so much, Matt. I always enjoy it.

Matt: And hopefully we’ve given you a better idea of how to protect a trade secret. I’m Matt Plessner,  and join us next time on Trade Secret Law Radio.

You’ve been listening to Trade Secret Law Radio, where trade secret protection, legal cases, and defenses are always the topic of the day.  Whether you are a trade secret attorney, a business looking to protect your trade secrets or have been accused of trade secret theft, we will answer your questions here.