Trade Secret Basics FAQ

Questions:

• What is a trade secret?
• What types of information can trade secrets protect?
• What rights does the owner of a trade secret have?
• How can a business protect its trade secrets?
• How can a business enforce its rights if someone steals or improperly discloses confidential information?
• Is stealing trade secrets a crime?

Answer:

What types of information can trade secrets protect?

Trade secrets often protect valuable technical information that cannot be sheltered under other forms of intellectual property law, such as the formula for Coca-Cola. Trade secrets may also:

• protect ideas that offer a business a competitive advantage, thereby enabling a company or individual to get a head start on the competition -- for example, an idea for a new type of product or a new website
• keep competitors from learning that a product or service is under development and from discovering its functional or technical attributes -- for example, how a new software program works
• protect valuable business information such as marketing plans, cost and price information and customer lists -- for example, a company's plans to launch a new product line
• protect "negative know-how" -- that is, information you've learned during the course of research and development on what not to do or what does not work optimally -- for example, research revealing that a new type of drug is ineffective, or
• protect any other information that has some value and is not generally known by your competitors -- for example, a list of customers ranked by how profitable their business is.