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 is a trade secret?

In most states, a trade secret may consist of any formula, pattern, physical device, idea, process or compilation of information that both:

• provides the owner of the information with a competitive advantage in the marketplace, and
• is treated in a way that can reasonably be expected to prevent the public or competitors from learning about it, absent improper acquisition or theft.

Some examples of potential trade secrets are:

• a formula for a sports drink
• survey methods used by professional pollsters
• recipes
• a new invention for which a patent application has not yet been filed
• marketing strategies
• manufacturing techniques, and
• computer algorithms.

Unlike other forms of intellectual property such as patents, copyrights and trademarks, trade secrecy is basically a do-it-yourself form of protection. You don't register with the government to secure your trade secret; you simply keep the information confidential. Trade secret protection lasts for as long as the secret is kept confidential. Once a trade secret is made available to the public, trade secret protection ends.