A trade secret is defined as a practice, process, instrument, design, commercial method, or formula that is not known by others and can be used by a business to gain economic advantages over competitors or customers. The scope of a trade secret is essentially unlimited.

More specifically, a trade secret is defined as a type of information that is:

- not known to the general population or to the public, or to relevant business circles; the information is not readily accessible;

- the information provides some type of economic advantage or benefit to the owner; the benefit comes both from the actual information and the fact that it is not known to the public; it should have commercial value because it is a secret; the value should be both potential and actual;

- the information should be subject to reasonable steps by the holder of the information to keep it secret; the steps can vary a lot depending on the actual information that has to be protected;

Trade secret protection continues for as long as the information is considered a trade secret. However, if the information becomes easily accessible to the public or competitors, the trade secret can no longer work, as the protection cannot be guaranteed.

Trade secrets are very important assets for an organization or business and are on par with other types of intellectual property, like trademarks and patents. Some experts say that trade secrets are the crown jewels of any intellectual property portfolio.

Want to learn more about trade secret law in Monroe County? Click here to contact the best patent and trademark attorneys in Key West!

Trade secrets compared to confidential information

Trade secrets are considered, by definition, confidential information. This information provides a company a competitive edge over its competition. However, not all confidential information can be a trade secret.

In a company, there are multiple types of confidential information, but only some are considered trade secrets. There are multiple levels of confidential information, and trade secrets are at the top of this ranking. For example, there is a layer of confidential, but easily accessible internal information, which can be accessed by all employees. However, access to trade secrets is highly controlled and only a few employees may know it. In this case, the normal processes to manage confidential information are not adequate for managing trade secrets.

Unfortunately, proprietary information, confidential information, know-how, and trade secrets are used interchangeably in many organizations. However, only trade secrets can be protected by law. Similarly, the remedies for the unauthorized revelation of this information may differ, depending on the type of information revealed.

The advantages of trade secret protection

Advantage #1 – Trade secrets can cover abstract ideas

This is a major advantage of trade secrets over patents, as they can offer protection for abstract ideas. This is important, especially after the 2014 Supreme Court decision in Alice Corp. v. CLS Bank International. In this ground-breaking case, the Supreme Court decided that if a process or method is drawn from an abstract idea, it cannot be transformed into a patent-worthy invention simply because it was implemented with the computer. This ruling has raised major concerns in the IT sector, as some existing software products may now have their patents invalidated. As a result, it may be wise to also obtain trade secret protection for a software product, in order to avoid uncertainty. Simply put, patents don't provide enough protection for some products.

All source codes and algorithms that have value and are kept confidential can be protected as trade secrets. Even already patented software products can qualify for trade secret protection. As long as a patentable idea is kept secret, the information is protectable by trade secret law. Talk to your patent and trademark attorney in Key West to learn more about patents and trade secrets.

Advantage #2 – The protection can last indefinitely

While copyrights last up to 100 years and patents last up to 20 years, trade secrets can potentially last forever. As long as the information remains a secret, the protection does not expire. This is how Coca-Cola has been able to keep the Merchandise 7x (the ingredients that give Coke its unique flavor) as a trade secret. If John Pemberton patented the recipe, he would have to disclose the ingredients during the filing process. The whole world would have learned Coca-Cola’s secret almost a century ago.

On the other hand, trade secret protection can be lost in an instant. As soon as the information becomes public, trade protection is lost and its status is almost impossible to be restored. Also, unlike patents, competitors can dissect your product and reverse-engineer it. In this case, they may or not be able to copy your idea. If they do find your secret, they can file for a patent themselves, excluding you or others from making, using, or selling that specific product. This is why ensuring secrecy is critically important for trade secrets. Click here to learn more about trade secret law in Monroe County!

Advantage #3 – Trade secret protection is cheap and easy to obtain

Trade secret protection is effective immediately and does not require upfront fees or a lengthy approval process. While filing for a patent often requires hiring an attorney, trade secret protection can be given immediately.

However, confidentiality must be guaranteed by the organization. Usually, extensive ongoing measures must be ensured by the organization, often at substantial expense. If the information is disclosed to the public, trade secret protection may be lost forever. To avoid this from happening, access to information must be restricted to a limited number of persons. Non-disclosure agreements (NDA) are often imposed by large organizations in order to provide an added layer of protection.

Want to learn more about trade secret law in Monroe County? Click here to contact the best patent and trademark attorneys in Key West!

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