Trade secrets are a unique form of intellectual property. Unlike other intellectual property types such as patents and trademarks, trade secrets are not registered with the government and can never expire. Instead, a trade secret is information pertinent to a business that is kept completely secret. Trade secrets are forms of intellectual property that are protected in all states from intentional release.
When an intellectual property owners goes before a court to request trade secret protection, there are six factors that determine whether a state will recognize their intellectual property as a trade secret. These factors are from the restatement of torts, and while considered by most states, they are not actual law.
The first factor that courts consider is the extent to which the information is known outside of the plaintiff’s business. In order for a trade secret to be considered an actual secret, the process must be completely novel. The intellectual property must also provide the company with a competitive edge. An example of a trade secret that meets this requirement would be the recipe for Coca-Cola, as the recipe is completely unknown by competitors.
The second factor is the extent to which the information is known by employees within the business. Trade secrets should only be released to the employees who need them. Coca-Cola prevents any employee from knowing more than one part of the soda recipe. This ensures that no single employee can obtain this particular trade secret.
Third, the courts consider the measures taken by the company to protect the trade secret. Examples listed by courts over the years include measures such as keeping the trade secret under lock and key, making anyone privy to the information sign a confidentiality agreement, and marking all relevant information “Trade Secret.”
The fourth factor is the value of the information to the plaintiff’s business competitors. The more valuable the trade secret, the more likely the courts will protect it. If the intellectual property is not necessarily valuable, or competitors are unlikely to use it, then the court may be unlikely to grant the trade secret the full extent of the law’s protection.
The fifth factor is the amount of time, effort, and money expended by the plaintiff in developing the information. The courts tend to protect trade secrets that were well researched or took extensive time to develop. Previously, family secrets have also been protected, given the amount of time they have existed.
Finally, the courts consider the difficulty with which the information or intellectual property could be acquired by others. In other words, the courts will not grant protection if a competitor can simply reverse engineer your trade secret.
If you have additional questions regarding your intellectual property and whether it's considered a trade secret, consult with an intellectual property attorney for further clarification.