As a business owner or inventor, you may have a lot of questions about trade secrets. Trade secrets refer to the data you prefer to keep hidden from competitors and even some employees. These secrets provide your business with a competitive edge that may be destroyed if it got into the wrong hands.
Forbes notes that the closest cousin of trade secrets in law is patent law. When people file a patent, it becomes public information in exchange for the protection. In contrast, most business people do not mean for trade secrets to ever see the light of day. Here are some commonly asked questions regarding this and their answers.
What counts as trade secrets?
Anything that brings value to a business when kept private may count as trade secrets. This may range from the recipe for the favorite item on the menu at a top restaurant to the computer algorithm for an app at a tech company.
How do businesses protect trade secrets?
Non-disclosure agreements help to deter workers, venders and partners from disclosing trade secrets. Company policies should also reflect active protection of the secret, such as signing out information or never allowing certain documents to leave a particular room.
What does trade secret law protect?
Protection is limited but necessary under trade secret law. It focuses on preventing people who know, use or come into contact with your company secrets from disclosing it. If a person threatens to share the information, you may be able to ask for an injunction in court.
How long can a business protect a trade secret for?
It lasts for as long as you manage to maintain a well-kept secret. Once the trade secret becomes public information it may no longer be protected. Note that sometimes data breaches and other unintentional hazards may make trade secrets public information. Also, sometimes a trade secret has an expiration date, such as when working on a new product.
Trade secret law is one of the most difficult to navigate. The overlapping of company policies with state and federal laws makes it even more so. One of its greatest drawbacks is that it relies so much on the competence and trustworthiness of others.
This article provides information on trade secrets. It should not be misconstrued as or used in place of legal advice.