TRADE SECRETS – Some Basic Considerations and Strategy

Written by Ben Esplin

In a previous post, I examined some 8 and 9-figure damage awards for trade secret misappropriation, which highlights the way in which trade secrets enforcement has grown real teeth in the past few years. Obtaining trade secret protection, under the law, does not really require much, but the requirements encourage proactive and organized action for companies that rely on one or more trade secrets to be competitive in the market.

Two of the requirements generally dictated under U.S. federal, and various state laws, for trade secret protection are (1) a “secret,” meeting several criteria, and (2) “reasonable measures” have been taken to protect the secret. Thus, to be able to leverage rights to trade secrets a company should identify trade secret information that meets the criteria for being a trade secret, and then document and follow specific measures taken to maintain the secrecy of the trade secret information.

These activities (i.e., identifying and documenting secrets, designing and documenting measures for protection, executing on measures for protection, etc.) involve nuanced strategy options that must be selected to balance various considerations. These considerations include, among other things, disruption to normal business activity, actual security of trade secrets, and potential damages models for potential misappropriation.

In many growing or thriving companies, trade secret information, and efforts to secure it, is constantly evolving due to influences like ongoing research and development or information gathering, dynamic corporate strategy, and evolving market conditions. As such, if trade secret information is fundamental to your business (or if you have not sought legal advice as to whether it is) and you do not have a process for actively managing trade secret information to enhance the legal leverage it can create, we recommend you work with an intellectual property lawyer to develop and execute one. If you would like to get a free consultation and understand what this kind of process would take, please reach out at your earliest convenience.