What Are Trade Secrets?

Richard Rimer

June 30, 2023

What Are Trade Secrets?

A Trade Secret is information driving independent economic value because it is not generally known or readily ascertainable. There are a set of laws helping companies safeguard valuable practices, processes or information (confidential information) used by a business and not known outside of the company.

As the name implies, the company must take reasonable steps to prevent others from knowing this valuable information. This includes only giving access to people who need to know the information. Simple steps such as passwords, locks, etc. should be put in place to keep others away from this information. More involved steps may be warranted in certain circumstances.

Trade Secrets

The US Protects Trade Secrets

The United States has a Uniform Trade Secrets Act which serves as the model act for most states’ laws regarding this subject. Additionally, Congress passed the Defend Trade Secrets Act in 2016. Courts can protect a trade secret by ordering that the misappropriation stop, that the secret be protected from public exposure, and the seizure of the misappropriated trade secret (in extraordinary circumstances). Courts can also award damages, court costs, reasonable attorneys’ fees and a permanent injunction.

Unlike traditional types of intellectual property, there is no way to register your rights in a trade secret. (Remember, it needs to stay a secret!) Taking stock of your confidential information is the first step in safeguarding it. Next, you must ensure you are taking steps to keep the information secure. Finally, you should monitor to make sure you are not finding instances of companies using your confidential information.