TRADE SECRET PRACTICE AREA

Trade secret law has evolved from the common law to a uniform code adopted by most states.

The Restatement (Third) of Unfair Competition, §39 (1995), defines a trade secret as:

“A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable in secret to afford an actual or potential economic advantage over others.”

The Uniform Trade Secrets Act (“USTA”), 14 Uniform L. Am. §1, et seq. (Master Edition 1990), adopted in 1979, with amendments in 1985, provides for a statutory codification of the law of misappropriation of trade secrets which has been adopted by most states. 

The USTA defines a trade secret as:

“. . . information, including a formula, pattern, compilation, program, device, method, technique, or process that:  (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from a disclosure or use, and

(ii) is the subject of efforts that that are reasonable under the circumstances to maintain its secrecy.”

The trade secret practice area deals with a body of law that protects the secrecy and use of trade secrets whether it be in actions for misappropriation of trade secrets, protecting orders in litigation and other means of protection of secrecy and economic value thereby.  Trade secret law represents a balancing of competing interests.  Businesses want the protection of their research and the returns on their development costs; employees want the freedom to use their learned skills and to be able to move to new jobs; and the consuming public wants innovative products and free competition in the marketplace.  The accommodation of these often conflicting interests is involved in the resolution of disputes over trade secrets.  The value of trade secrets continues to grow in our information-age economy as does the mobility of the work force. Both forces are increasing pressure on trade secrets.

Two of the primary policy concerns of trade secret law are (1) encouragement of invention, and (2) enforcing ethics in business.  Issues that often arise in this area of law that require careful analysis include, (a) what is the actual trade secret, (b) who owns the trade secret, (c) what are the remedies for misappropriation, (d) what efforts must be made to maintain secrecy, and (e) how does trade secret law interface with other laws, including patent, copyright, antitrust, fraud, civil theft, restraints on employment, including non-disclosure agreements, non-solicitation agreements, and non-compete agreements.

Both federal and state Rules of Civil Procedure have provisions for protecting disclosure of trade secrets in litigation.  Owners of trade secrets can sometimes share trade secrets with limited customers, business partners or employees without endangering the information’s secrecy, if they do so under confidentiality agreements.  Specialized knowledge of trade secret law can be beneficial not only in litigation, but in crafting confidentiality, license and employment agreements and in setting up procedures to protect the secrecy of valuable business and technical information. 

Please visit the Trade Secret Law Webpage by clicking HERE.