Trade Secret – What Exactly Is a Trade Secret?
Invariably someone new to the considerations of intellectual property will ask - "What exactly is a trade secret"
Trade secrets are sometimes described as an alternative to patents for protecting an invention
--- but only for some inventions, and only if the owners take certain actions.
Inaccurate or out-of-date “folklore” about trade secrets is widespread. We can
advise you on whether your invention could be defensible as a trade secret and
what protective measures to take. So yes, there are some "Myths" about trade secrets:
secrets are free. Just don’t publish, or try to patent, the invention.”
Not true. An invention that is not published or filed with the Patent
Office doesn’t automatically become a court-enforceable trade secret.
The following eligibility requirements also need to be met:
It’s not already public knowledge.
It’s possible to keep secret.
It’s used in business to provide a
product or service that is commercially sold.
The owner benefits economically from the
The owner takes commercially reasonable
measures to safeguard the secret.
“If your trade secret is leaked, a court will award you compensation.”
Not always true. Among other things, it depends on how the leak
happens. Your defendant has to have accessed the trade secret by some kind of
wrongdoing. “Wrongdoing” includes illegal acts, such as burglary, extortion, or
industrial espionage. It may also include breaches of confidentiality,
non-compete, or work-for-hire clauses in contracts, although states differ as
to the types of contracts they enforce. However, someone who independently
In some circumstances, trade secrets may be used or exposed without
wrongdoing. If someone independently happens to conceive the same idea, they
have done no wrong. If their conception is truly independent, a court won’t
order them to compensate you for the loss of the trade secret. However, if
there are suspicious circumstances, such as a connection with someone who
previously learned the trade secret from you, their conception may not have
been truly independent, and you may be entitled to compensation.
Not exactly true: “Trade secrets never expire.”
Trade secrets don’t have fixed expiration dates. They are enforceable as
long as they meet all the legal requirements for a trade secret. However, they effectively
“expire” when they are exposed to the public, whether intentionally or
Not true anymore:
“Trade secrets are only protected in state courts, and the laws vary a lot
In 2016, the federal Defend Trade Secrets Act gave trade secret owners
the right to sue defenders in federal court. State courts are also available
and may be more convenient if there aren’t any interstate issues. Now that
almost all the states have adopted some form of the Trade Secret Act, the
variation between states has been reduced.
Why choose an attorney who knows both patents and trade secrets?
When you need to decide whether to protect an invention as a patent or a
trade secret, it’s best to consult an attorney who’s familiar with both and can
make recommendations that fit your business strategy. We can advise you on how
to set up and maintain a trade secret policy for your company, and how to
decide which inventions could become valuable trade secrets.