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What information qualifies as a trade secret?

On Behalf of | Jun 6, 2022 | Intellectual Property

Your company’s trade secrets can be the lifeline of your business. When such information is made available to other people or to competitors, the survival of your business may be on the line.

However, not all information privy to your business qualifies as a trade secret. There are certain elements such knowledge must meet to be considered a trade secret protected by the law.

Features of a trade secret

While state laws govern trade secrets, most states (including California) have adopted the Uniform Trade Secrets Act (UTSA). Under the Act, a trade secret has three main features, as discussed below.

  • It has to be a secret. The information under question must not be readily accessible or available to third parties. For instance, if the public is aware of it or it’s available on the internet, such information loses its status as a trade secret.
  • The information must be beneficial to you. A trade secret should be of economic value, and it must give you a competitive edge over your competitors.
  • You must have taken reasonable steps to keep the information secret. This may include using confidentiality agreements between your business and other stakeholders or securing your company’s internal structure to keep the information confidential.

Protecting your company’s trade secrets

Misappropriation of trade secrets can cost your company a lot. Therefore, it is important to take strong measures to keep them safe. While a Non-Disclosure Agreement (NDA) is the most widely used method, it is crucial to explore other effective ways and options at your disposal that suit the nature of your business.

Remember, technology is evolving, and information can be accessed remotely. Staying current with the changing times and knowing what to do to keep your trade secrets safe will ensure the prosperity of your business.