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What’s a trade secret and how is it protected?

A trade secret is information that gives a business a commercial advantage over its competitors that is kept secret. As the name implies, the biggest aspect of a trade secret is that it must truly be a secret and the business that wants to protect it must take reasonable steps to maintain the secret in confidence and limit access to others. Something that is in the public domain or well known cannot be a secret. Typical types of protectable trade secrets are customer lists, recipes, formulas, and compilations of information that are not readily ascertainable.

What types of materials have been held to be protectable trade secrets?

Examples of valuable trade secrets would be recipes, processes used to develop chemicals, sources of products used to manufacture goods, business plans and projected business strategies, lists of targeted consumers, telephone or email contact information assembled of probable buyers of a service. A variety of information can qualify as trade secrets, so long as the information is held close to the vest of the owner.

What is the duration of a trade secret and how does it compare to patent protection?

The beauty of a trade secret is that it can last indefinitely. Unlike a patent, which typically only lasts about 20 years, a trade secret is not limited by any particular duration. In some instances where a product is probably not eligible for patent protection anyway, holding a technology as a trade secret may be an option to consider. A patent is a good option if (a) it is likely to be granted and (b) the technology would be easy to “reverse engineer”. Reverse engineering is a lawful process where competitors may try to figure out how a product is made by taking it apart, measuring it, and generally analyzing to see how it works.

What kinds of issues come up in trade secret litigation?

The big picture issues are whether the technology is a trade secret and whether it has been protected adequately to maintain the secret under law. If a defendant can prove that the “trade secret” information was not actually kept in confidence, and it was known by strangers to the litigation, then the game may be over. If the “secret” is readily ascertainable and would be known, then the game may also be over for the plaintiff. If confidentiality agreements were signed and in place, this can also enhance a plaintiff’s chances of showing a protectable secret, and may also provide a breach of contract lawsuit.

Other more detailed issues come up in trade secret litigation concerning the logistics of evidence gathering and how to both maintain the alleged secrets while simultaneously allowing defendants to investigate the merits of a plaintiff’s case. In most cases, detailed protective orders have to be worked out to significantly restrict access to litigants and their counsel on a need-to-know basis. Often, evidence will be sealed, and pleadings will have to be sealed to prevent otherwise proprietary information from becoming a part of the public record inadvertently.

Buche & Associates, P.C. can help your business both to devise strategies to protect trade secret assets internally, and also to enforce trade secret rights if they are taken without authorization by company insiders or others. By the same token, if you or your business has been accused of taking and making unauthorized use of trade secrets, we can defend those allegations.

Our law firm is experienced with litigation relating to unfair competition, misappropriation of trade secrets, and accompanying contractual breaches. We offer a free initial consultation to discuss your case and to see if we may be of service. We are based in San Diego, California, but also have offices in Los Angeles and Houston, Texas.