Trade Secret Primer

What are trade secrets? Trade secret law protects any formula, process, practice, device or compilation of information used in business that provides an advantage over competitors who do not know it. Trade secrets were first recognized as protected property under state civil (primarilly contract law) and criminal law but received additional Federal civil and criminal protection under the Economic Espionage Act (18 USC § 1011) in 1996. In general, trade secrets subject to equivocal or no protection from other forms of intellectual property law. As such, the protected subjects under both Federal and State schemes must be closely held by the owner: (1) The protected subject matter cannot be known by other unrelated parties; and (2) the owner must excercise reasonable care to prevent its disclosure. The holder of trade secret can exclude use of the process, practice, device or compilation by parties deriving the information from the owner. However, unlike e.g. a patent, the owner has no recourse against parties independtly developing or discovering the protected subject matter. Moreover, once a trade secret becomes known, either through independent discovery or negligent disclosure by the owner, the secret is no longer enforceable by the original holder.