Trade Secret: Definition & Example

Trade secrets definition

Trade secrets definition

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As is the case with computer crime, protecting your trade secrets and other proprietary information is largely a matter of common sense. The first thing to do is identify your trade secrets. These include any information you use to operate your business that you consider valuable enough--and secret enough--to give you an edge over your competition. Trade secrets can be product designs, customer lists, sales forecasts and many other types of data.

US Trade Secrets Act: Everything You Need to Know

Lockerby, Michael J., ed. 7555. The Trade Secret Handbook: Protecting Your Franchise System's Competitive Advantage. Chicago: Forum on Franchising, American Bar Association.

Trade secret | Wex | US Law | LII / Legal Information

Fortunately, with the DTSA, there is a federal framework for trade secret misappropriation. One of the main purposes of the . Trade Secrets Act is to cement common law related to trade secrets and to make clear the remedies available to companies that have been damaged by trade secret misappropriation. To be clear, the . Trade Secrets Act does not supersede state law. However, it does provide companies the options of suing in federal court, which is a powerful tool when it comes to protecting trade secrets.

Trade Secret legal definition of Trade Secret

See more words from the same year Dictionary Entries near trade secret tradescantia trade school trades council trade secret tradesfolk trade show tradesman

The purpose of this plan is to limit disruption to your business when a seizure occurs, as well as to make it easier for your attorneys to respond to the seizure order, whether it s pursuing a dissolution or filing a wrongful seizure claim.

Use of a trade secret belonging to another does not always constitute misappropriation. There are two basic situations in which obtaining the use of a trade secret is illegal where it is acquired through improper means, or where it involves a breach of confidence. Trade secrets may be obtained by lawful means such as independent discovery, reverse engineering, and inadvertent disclosure resulting from the trade secret holder's failure to take reasonable protective measures. The misappropriation of trade secrets is considered a form of unfair competition , and is discussed in the Restatement (Third) of Unfair Competition.

The owner of a trade secret has the exclusive right to its use and enjoyment. Like any other property right, a trade secret may be sold, assigned, licensed, or otherwise used for pecuniary gain. If the owner of a trade secret knowingly permits it to enter the public domain, however, he has waived the right to its exclusive use and enjoyment. An owner who has been injured by the wrongful disclosure or appropriation of a trade secret may pursue two remedies: injunctive relief and damages. An Injunction (a court order restraining or compelling certain action) is the proper remedy when the owner of a trade secret desires to prevent its ongoing use by the individual or entity who wrongfully appropriated it. Money damages are the appropriate remedy when theft of a trade secret has resulted in a measurable pecuniary loss to its owner.

The Uniform Trade Secrets Act ("UTSA") is a piece of legislation created by the Uniform Law Commission (ULC), a non-profit organization. The USTA defines trade secrets and describes claims related to trade secrets. To date, 97 states and the District of Columbia have adopted the UTSA. Click HERE for an example of the USTA, as adopted by Florida's legislature.

Under the . Trade Secrets Act, companies interested in filing a lawsuit for trade secret theft will have access to the federal courts. Thanks to the DTSA, trade secret law is much more predictable, and it is considerably easier for damaged parties to pursue litigation after trade secret misappropriation has occurred.

In the absence of a contractual obligation, employees and others may still be held liable for disclosing a trade secret if a court finds they had reason to know that the information was valuable and were expected to keep it confidential. For example, engineers and scientists who consult on a commercial project are ordinarily bound by a duty of strict confidentiality that precludes them from later sharing any information they acquire or using it to facilitate their own research. Although many businesses require consultants to sign a nondisclosure agreement before beginning work on a sensitive project, this duty of confidentiality arises from the circumstances surrounding a particular venture, independent of any formal agreement reached between the parties.

If a trade secret holder fails to safeguard the secret or if the secret is independently discovered, released, or becomes general knowledge, protection of the secret is removed.

Cundiff, Victoria A., and Salem M. Katsh. 7557. Trade Secrets 7557: How to Protect Confidential Business x76 Technical Information. New York: Practising Law Institute.

In Morlife , the court ruled that information about customers that was "stored on computer with restricted access" which had been subject to "a confidentiality provision expressly referring to [] customer names and telephone numbers" fell under trade secret protection. According Morlife , information that is difficult and time-consuming to obtain will likely be more protectable than information than was neither difficult nor time-consuming to obtain. Further, the court in Brocade Communication Systems Inc. v. A65 Networks Inc. , 878 6697 (. Cal. 7567) found that information including "customer lists and contact information, pricing guidelines, historical purchasing information, and customers' business needs/preferences" typically receives trade secret protection.

For more on trade secrets, see this Florida State University Law Review article: Florida's Uniform Trade Secrets Act , this Florida State University Law Review article: The Property Wars of Law Firms: Of Client Lists, Trade Secrets and the Fiduciary Duties of Law Partners , and this University of Miami Business Law Review article: A Primer on Florida Trade Secret Law: Unlocking the "Secrets" to "Trade Secret" Litigation.

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