Economic Value
A trade secret is any confidential information owned by a business that derives economic value from not being known by those outside the business. The confidential information might be of economic value to those outside the business, if known by them. The confidential information can include such things as:
- Formulas, patterns, programs, methods, or processes for doing business;
- Customer lists;
- Accounting and financial records; and
- Other corporate records.
Trade secrets are only trade secrets as long as they are confidential. The owner cannot file a application with the government to protect the trade secrets, unlike with patents, trademarks and copyrights. If reasonable steps are taken to maintain secrecy, trade secrets are usually protected by the courts.
Restricting Access
Access to trade secrets should be restricted to those who have a need to know the information. Employers should take steps to protect their trade secrets by, among other things, requiring employees to sign confidentiality and non-disclosure agreements. The employer may also with to maintain a log of those who access particularly sensitive information.
Unauthorized Disclosure
In the event trade secret information illegally acquired by an unauthorized party, the company can proceed to court asking for an injunction for return of the information and prohibiting its use. This sometimes happens when employees leave the company and take trade secret information with them. If the company has suffered damage as a result of the unauthorized disclosure, monetary damages in addition to an injunction may be awarded by the courts.
