Trade Secrets

A trade secret is information, including a formula, pattern, compilation, program, device, method, technique or process, which provides the owner a competitive edge

A trade secret is something that is substantially secret (i.e., it is not generally known to the public and it is not readily ascertainable through proper means). 

A trade secret confers the owner something of economic value, which is derived from the information being generally unknown.

A trade secret is something the owner must also take reasonable precautions to keep the information secret (e.g., disclose the information only to those in the business that need the information to perform their duties and require employees to sign confidentiality agreements).

The owner of a trade secret can protect the trade secret using non-disclosure agreements and non-compete agreements, which can be a condition of an employment agreement, and assignments, wherein any rights in the trade secret can be assigned or surrendered. 

A trade secret cannot be acquired by improper means.  Improper means includes theft, bribery, misrepresentation, use of a computer or computer network without authority, breach of a duty or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. 

If a trade secret is acquired by improper means, it is generally deemed to have been misappropriated.  See the Misappropriation page.

Each state has its own laws related to trade secrets.  Most states have adopted the Uniform Trade Secrets Act (UTSA).  For a list of states that have enacted UTSA, see a map of the States Enacting UTSA and the Restatement of Torts 757.  For Virginia’s codification of UTSA, see Code of Virginia Title 59.1

Theft or misappropriation of a trade secret can be a federal crime.  See Protection of Trade Secrets (18 USC Chapter 90).  For example, it is a federal crime to steal a trade secret to benefit a foreign power.  See Economic Espionage (18 USC 1831).  Such crimes can be reported to the FBI Counterintelligence Division.  It is also a federal crime to steal a trade secret for commercial or economic purposes.  See Theft of Trade Secrets (18 USC 1832)

For international protection of trade secrets, see Article 39 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.

If you have a question about trade secrets, askme at thedford@askmeip.com.