Tuesday, June 4, 2013

How secret must a trade secret be?

I previously discussed trade secrets, and the importance of maintaining the confidentiality of your proprietary information. Unlike patents, copyrights or trademarks, there is no federal registry for trade secrets. So, trade secret status can only be determined at trial. Consequently, large companies typically take every precaution imaginable in safeguarding proprietary information, in the event of later litigation. The more evidence a company has that it protected its proprietary information, the more likely it will be considered a trade secret.

The Uniform Trade Secrets Act requires "reasonable efforts under the circumstances" to maintain secrecy. The reasonableness of efforts is determined by the facts of each case. Every little thing matters. If you think you have a trade secret, you should do everything you can to protect it, in the event of later litigation. You should not just take a "belt and suspenders" approach, but a quadruple belt and quintuple suspenders approach to ensure that you are making reasonable efforts under the circumstances to protect your proprietary information.

Trade secret cases have hinged on such things as keeping the information in a locked desk as opposed to an unlocked desk, or keeping information in an unlocked office to which numerous people had access. It matters whether all of your employees have access to it, or only those that need it. It matters whether the employees sign a nondisclosure or confidentiality agreement. It matters whether you post too much information about it on your website. Again, everything matters. Any measure you can implement to persuade a jury that the information was confidential and proprietary is valuable in a later trial.

No comments:

Post a Comment