by Intellectual Property Attorney Bill Honaker, the IP Guy
Every business has trade secrets – confidential information that may be sold or licensed, such as a device, formula, program or technique. To qualify as a trade secret, information must be commercially valuable, known only to a limited group of people and be subject to reasonable steps taken to keep it secret. For example, Google’s search algorithm, KFC’s secret blend of herbs and spices, and a company’s client list all qualify as trade secrets.
Trade secrets are not registered with a government agency, although they can be the most valuable IP a business has. They’re not unprotected, however – the Uniform Trade Secrets Act (UTSA) is a piece of legislation published in 1979 and enacted by most states. One of the UTSA’s goals is to make the state laws governing trade secrets uniform. In states where the USTA is not enacted, infringement remains a common law tort. Trade secrets are also protected federally under the Defend Trade Secrets Act (DTSA), which allows the owner of a trade secret to sue in federal court when their trade secrets have been infringed upon.
It’s important for business owners to understand the trade secrets they have and the requirements to protect them. To make a trade secret infringement claim, you need to prove that 1) the subject matter at issue is in fact a trade secret, 2) you made reasonable efforts to keep it protected and 3) somebody wrongfully took the information.
Intellectual property is one of your most valuable assets, so take steps early to invest in and protect it. If you don’t, there can be significant consequences.
About the Author:
Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.