Some Very Common FAQs on trade Secrets law Answered

Apr 7 02:00 2022 NickJoseph Print This Article

Here is everything you should know about trade secret law and some general questions answered about it.


Here is everything you should know about trade secret law and some general questions answered about it.


Trade secrets are intellectual property (IP),Guest Posting consisting of any formula, pattern and ideas, or devices, a compilation of information. Unlike any form of IP like copyright and patent, even trademark for that matter, all of it requires registration. 


Only then will it come into effect and will get protected at all costs. But, trade secrets laws are more of 'DO-IT-YOURSELF.’ The trade secrets law speaks about: 


  • It offers the owner of the information a competitive advantage in the market.
  • It is protected and treated in a way that prevents the public or the competitor from knowing, learning about it, or through theft. 


Under the Uniform Trade Secrets Act (“UTSA”), the information derived from independent economic value is unknown, but the efforts are to maintain secrecy. 


For the information to be kept secret and to keep the status protected, the holder should put reasonable efforts to preserve its confidentiality. 


Unlike other forms of intellectual property, Trade Secrets Laws are not merely easily visible or in a physical form as it consists of processes, methods, or even specific ways of doing things. 


Thus, it can be a bit intimidating to understand or grasp the actual concept of trade secrets. It is essential to know that you do not register with the government to protect your secret. 


The information is most likely under the wrap; you are trying to cover it with your efforts. As long as the information is kept confidential and minimal people know about it, the secret lasts. 


There is no such statutory period for the information to last; it all depends on secret confidentiality. However, as soon as the trade secret is available to the public, the protection ends.


Let’s discuss everything about trade secrets law, the examples, different advantages, and benefits. Also, learn how it differs from another type of IP and why its protection is crucial. Once you understand it, you will be able to make rational decisions to safeguard your information. 

What are some examples of trade secrets law? 


Information under the trade secrets law is formulas, patterns, compilations, even devices, methods, techniques, and more. Some examples include customer lists, manufacturing processes, the secret of a recipe, and more. 


The economic value for such information can get considered as actual or sometimes potential. Like, if you have not started producing a particular device, even though you have the blueprint for the same. 


You can still protect the blueprint under the trade secrets law based on its potential value. Sometimes, the information of certain things can also be protected as a secret and can be protectable as an invention under patent rights. 


The entire process of converting raw materials into usable finished or other usable materials. Like for example: 


  • Recipes for food or food products like KFC chicken ingredients
  • Methods or processes of manufacturing certain consumer products
  • Chemical or secret formulas for cleaning products
  • Any new invention
  • A computer algorithm
  • Marketing strategies
  • Technological processes too which includes device, machinery, or computer


Visit to know more about the usefulness of trade secrets law! 

Are there any advantages of trade secrets law? 


  • Unlike a patent, the best and the most interesting advantage it offers is the protection of abstract ideas. 
  • While patents last for 20 years and copyright up to 100 years, trade secrets last potentially forever, as long as it is a secret. 
  • Trade secrets law works effectively and immediately and does not require you to pay any upfront fee, typically associated with patent prosecution.
  • You don't have to hire an attorney like you do when filing for a patent. 
In which case, trade secrets law can be beneficial? 


  • When the subject matter kept as a secret can not be patentable by any chance
  • When the likelihood of the information being a secret can last for a long time
  • If the trade secret is not declared to be worth patentable value, which is why it remains to be a trade secret only
  • When the secret gets based on a process, like a manufacturing process and not the end product, it is more like reverse engineering.
Can you prove a Trade Secret Claim? 


You have to prove that the:


  • The subject matter that you are claiming is a trade secret
  • You made all possible efforts and responsibility to secure the information from being disclosed
  • and somebody else, who knew about the secret misappropriated the information 


Trade Secrets Law state that the secret can get acquired improperly or occur due to confidentiality breach. A competitor can obtain the information through accidental disclosure or by doing unfair means. It’s essential to know the reason behind the infringement to file a claim. 


When filing for a claim, you have to prove and show confidence that the information got revealed. If the information wasn’t revealed and it came out accidentally, the filing is not possible. It can only be possible when there is unfair or infringement of trade secrets taking place. 


When the information is out to the public, it doesn't become a secret anymore, and it is of no use. Therefore, you have to put all your efforts into protecting the trade secrets.

How are trade secrets protected? 


Under the trade secrets law, the secrets get protected without the need for registration. That means it doesn't require registration or going through formal procedures for protection. 


It can be protected for an unlimited period unless there is a discovery that the information gets revealed. It can be discovered or even legally acquired by others and disclosed to the public. 


For this very reason, the protection of trade secrets seems to look attractive for various companies. Visit to know in detail how trade secrets law protects trade secrets.

What rights do Trade Secrets confer? 


A trade secret can protect the list of the below-mentioned group of people from using, copying, or even benefiting from the secrets. With that, it also protects from disclosure without permission. 


  • The duty of confidentiality binds people and to not disclose or use trade secret information. It will include employees who contact the employer's trade secret as a part of their job. 
  • People who have acquired the secret through improper means like theft, industrial espionage, and even bribery. 
  • People who have learned about the trade secret unintentionally, by accident, or by mistake. But, they had a reason to know about the information and trade secrets protected it. 
  • People who sign nondisclosure agreements promising not to disclose any trade secrets without the authorization of the owner. It is one of the most effective ways of protecting or securing the information in the trade secrets law. It establishes a duty of confidentiality that needs to get attained at all costs. 
What is the Uniform Trade Secret Act? 


A uniform trade secret is a model law drafted by the National Conference of Commissioners on Uniform State Laws. These are laws that guide common law trade secret protection. The model is relatively short, includes a handful of provisions, and 49 states have enacted it to: 


  • Define the types of information eligible for trade secret protection
  • Set out a private cause of action for trade secret misappropriation
  • Provides remedies for misappropriation, including injunctions, damages, and, in some instances, attorneys' fees
How Defend Trade Secrets Law Works?


The Defend Trade Secrets Act passed in 2016 is a US federal law. It allows the owner of the trade secret to sue the court when the secret gets misappropriated. This trade secrets law aligns closely with the uniform trade secrets act and gets adopted in almost every state in the US. 


President Obama signed the DTSA, and it came into effect on May 11, 2016. This new act created an action for trade secret infringement and provided remedies to cure it. Creating such a federal cause of action, the DTSA made it easier for people, the owners, to handle their dispute and resolve it in the federal court. 


Before the law came into the picture, such misappropriation claims were a matter of state law. The defense trade secrets law came into the picture to create uniformity in all states, as a federal trade secret misappropriation law. It provides statutory damages and remedies to the owner when any sort of misappropriation occurs. 

What Precautionary Measures to be taken by Businesses for trade secrets? 


Trade secrets law came into existence to give the business owners relief for protecting their secrets! It gets widely used in business, and heavily large companies rely on it to protect their IP. Even though people know it is not legal protection or registered like other IPs, it is still a choice. Very known companies like the Coca-Cola formula were one example that practised trade secrets. 


Business owners need to take necessary precautions to protect their secrets. It includes: 


  • Considering whether their trade secrets can be patentable or not? If yes, will it be protected and secured through a patent?
  • Very few people in your business should know your secret since it is an asset to your organization. The lesser people know, the higher chances of it being confidential long enough. 
  • Very few people should have access to building or documentation, IT security for the trade secret. 
  • If the employee owes confidentiality to the employer without an agreement, a higher risk of threat gets involved. To maintain confidentiality, an employer must let the employee sign a contract for a limited time. 
  • Also, your business can sign a confidentiality agreement with the business partner.
Is stealing a crime under trade secrets law? 


Intentional theft of the trade secret can be considered a crime under both federal and state law. One of the most important federal laws dealing with trade secret theft is the Economic Espionage Act of 1996 (EEA). 


It gives the attorneys the power to prosecute any person, individual, or even company involved in secret misappropriation. The punishment will get based on how severely they have affected the secret by stealing, copying, or receiving trade secrets. Penalties for such violations differ and are pretty severe, like hefty fines. 


In some cases, the violators can also get imprisonment for up to 10 years. Here, the EEA gets applicable to theft happening within the US and outside the US. It is only when the thief is an American citizen or corporation. 


Read more about stealing as a crime under trade secret law at

Why is trade secrets law an essential consideration for protection? 


In countries, both the developing and developed ones, fair competition has to be a thing. The competition between enterprises is said to be an appropriate means for satisfying the demand and supply of the economy. Consumers are happy when served rightly, and it speaks about the entire society as a whole. 


Competition is the main force that drives the business to grow ahead, think out of the box, and do unique things. Through competition, innovation occurs, businesses tend to go beyond and give satisfaction to the consumer. Trade secrets law is an important way of protecting business secrets, so they succeed, and there is no copying. 

What should I do to protect my trade secrets? 


Protective measures can get adapted to protect the trade secret: physical security, digital security, and legal standards. It can include a confidentiality agreement, nondisclosure agreement, and non-compete agreement. 


  • When talking about physical security measures, it involves storing secret information in a secure space. And, the secured environment has limited access to people, only those who genuinely deserve to be present. 


They have to be pre-authorized individuals who are ready to safeguard the information and protect the secret. Through restriction in a specific part of your organization, you ensure that the secret is in control by using keycards, monitors, or others. 


  • While moving on with digital security measures includes protection through strong passwords, firewall protection, and more. Even limiting employee access to websites or networks can help a lot. 


Portable flash drives used in the company can also get restricted through encryption or banned since portable flash drives are the easiest way to get the secrets out. 


  • Legal security measures to trade secrets law involve protecting the secrecy of information through confidentiality agreements, non-compete agreements, and NDAs. With that, there can be other ways to adopt for having systematic and sound procedures that protect the company’s secret information. 


The company should make sure that the trade secrets are marked 'Confidential' at all costs. With that, the employee should get trained on a routine basis on how to handle the trade secrets. It occurs while hiring new employees or during the exit interview. Newly hired employees should get information on trade secrets law, the importance, and agreements. 


Visit to know how to protect your trade secrets under trade secrets law.

Is it possible to sell or license a secret under trade secrets law? 


Trade secrets are property rights and they can be assigned or licensed to any other person. The owner or holder of the secret has the right and can authorize a third party to access, use and enjoy the trade secret information. 


But, there are certain restrictions due to the nature of the trade secret information. It doesn't seem to be that easy for the owner to share the information with others since it is difficult to determine whether the information meets the condition well or not for its protection. 


Therefore, when comparing it with the patent, it becomes pretty much discomforting to transfer, sell or license the secret. There can be many legal issues or disputes that can arise out of it. 


Since the third person will be getting all the information about its value, utility, purpose, there needs to be an agreement. It can be a non-disclosure or confidentiality agreement signed by both the parties, the licensor and the licensee. The owner giving the information should have to maintain reasonable steps to keep the information a secret. 


Safeguarding your Information through trade secrets law

Now that you know what are trade secrets law. It is best to secure your crucial information in a way that doesn't get misappropriated. You have to take the proper measures and follow the steps to keep it confidential. Not disclosing it to a large number of people will ensure your secret gets safeguarded longer enough.


If you wish to know more about trade secret law, you can visit Get Legal. You can also seek guidance on how to restrict access to information, the trade secrets law, punishment for infringement, and more. Having more information on it will benefit you in the long run.

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