What is a Trade Secret?
Put simply, a trade secret is information which derives independent economic value from being not generally known or readily ascertainable through proper means. It could be anything from a customer list to the highly secret formula for Coca-Cola.
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What Things Qualify for Trade Secret Protection?
Any formula, process, design, or compilation of information that is not generally ascertainable and provides a business with a competitive advantage, qualifies as a trade secret. The idea is that this ‘thing’ derives its value to the holder from being a secret. That is, its value provides some competitive advantage because it is not known by others in the trade.
Specifically, the Uniform Trade Secrets Act (UTSA) defines a “trade secret” as “information, including a formula, pattern, compilation, program, device, method, technique, or process that” derives independent economic value from its secrecy and has reasonable precautions taken to protect from its unauthorized dissemination.
Protecting Your Trade Secret Through a Misappropriation Claim
A business can protect the value of its trade secrets by bringing a misappropriation claim against anyone who improperly accesses or shares the secret. When a trade secret is misappropriated, it can be financially devastating to a business that may lose a valuable revenue stream, and recourse could be appropriate.
Generally, misappropriation of a trade secret happens where the secret is acquired through improper means, or where someone with authorized access breaches their confidence in sharing the secret with an unauthorized party or using it beyond the scope of their authorization.
When such misappropriation occurs, an injunction is proper to stop any further misappropriation. However, monetary recoveries are also available through a tort action for misappropriation of the trade secret.
Any business seeking to protect its trade secret should be aware of what trade secret status protects and how to reasonably ensure this protection is afforded.
For more information on trade secrets and intellectual property in general, see our trade secret services practice page.
Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.
This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.
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