Trade Secrets
 

Some of the ways we assist our clients with protecting their trade secrets include:

  • Auditing trade secret portfolios and protections

  • Working to identify and evaluate trade secrets

  • Creating a trade secret protection program to fit the business needs.

  • Drafting non-compete agreements, intellectual property assignments, and confidentiality and non-disclosure agreements

  • Establishing procedures and tools to monitor and police trade secrets against theft and espionage

 

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Information on this site is for informational purposes only.  It is not intended to be and is not considered to be legal advice.  Transmission is not intended to create and receipt does not establish an attorney-client relationship. Legal advice of any nature should be sought from legal counsel.
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Not certified by the Texas Board of Legal Specialization.


 
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Trade Secrets consist of information that provides benefit or competitive advantage and is treated as confidential. This includes operational information such as processes, methods, machines; or other information such as customer lists, materials, and terms and prices.

TRADE SECRETS


Businesses often rely on confidential information -- inventions, strategies and processes -- to keep their competitive edge. If such information is improperly disclosed -- for example, by a former employee -- or otherwise illegally acquired by a competitor, a business owner can turn to trade secret law for help.

What is a trade secret?

In most states, a trade secret may consist of any formula, pattern, physical device, idea, process or compilation of information that both:

  • provides the owner of the information with a competitive advantage in the marketplace, and

  • is treated in a way that can reasonably be expected to prevent the public or competitors from learning about it, absent improper acquisition or theft

  • protect ideas that offer a business a competitive advantage, thereby enabling a company or individual to get a head start on the competition -- for example, an idea for a new type of product or a new website

  • keep competitors from learning that a product or service is under development and from discovering its functional or technical attributes -- for example, how a new software program works

  • protect valuable business information such as marketing plans, cost and price information and customer lists -- for example, a company's plans to launch a new product line

protect "negative know-how" -- that is, information you've learned during the course of research and development on what not to do or what does not work

  • optimally -- for example, research revealing that a new type of drug is ineffective, or

  • protect any other information that has some value and is not generally known by your competitors -- for example, a list of customers ranked by how profitable their business is

You don't register with the government to secure your trade secret; you simply keep the information confidential. Trade secret protection lasts for as long as the secret is kept confidential. Once a trade secret is made available to the public, trade secret protection ends.

Simply calling information a trade secret will not make it so. A business must affirmatively behave in a way that proves its desire to keep the information secret.

Sometimes the very best way to protect trade secrets is through use of nondisclosure agreements. Courts have repeatedly reiterated that the use of nondisclosure agreements is the most important way to maintain the secrecy of confidential information.

To prevail in a trade secret infringement suit, a trade secret owner must show (1) that the information alleged to be confidential provides a competitive advantage and (2) the information really is maintained in secrecy. In addition, the trade secret owner must show that the information was either improperly acquired by the defendant (if the defendant is accused of making commercial use of the secret) or improperly disclosed by the defendant (if the defendant is accused of leaking the information).

 

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