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Trade Secrets vis-à-vis Patents (Demo)
[Module Excerpt]

Patent Law Fundamentals | Trade Secret Module | Patent Awakenings Situational Analysis
 
 
1. Overview of Trade Secret Law - trade secret law provides protection against improper dissemination and improper acquisition of the subject matter of a trade secret.  In some circumstances, trade secret law provides protection for matter that otherwise may be protected by a utility patent (e.g., a composition of a product, or a method of manufacture); in such circumstances, selecting protection through the trade secret laws provides benefits and drawbacks when compared to patent law protection.  In other circumstances, trade secret law is the only option for protecting matter because the matter is not protectable under patent law (e.g., customer lists, marketing strategies).
 
Warning! - The decision of whether to seek patent protection or to rely on trade secret protection is highly dependent on the facts of your particular situation.  Your decision should be made only after a thorough consultation with your patent attorney.  The decision is critical to the nature of the protection you will receive.  The decision is also critical to how you will proceed to obtain and maintain protection.5
 
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 3. What is a trade secret? - a common definition of trade secrets is "any formula, pattern, device or compilation of information used in one's business, which gives the owner an opportunity to obtain an advantage over competitors who do not know or use it." (Restatement of Torts, §757)6
 
 To further understand what a trade secret is consider the following-
 
 During a trial, a plaintiff alleging a violation of trade secret laws must establish that a trade secret, in fact, exists.  Six factors used to determine if a trade secret exists include:
    A)  How widely the information is known outside the plaintiff's company- the less widely known the information is, the more likely the information will be considered a trade secret.  Unlike patents, there is no requirement of novelty.  It is possible that one or more third parties may use subject matter that you choose to protect as a trade secret.
     
     B)  What measures did the plaintiff take to ensure secrecy - to maintain information as a trade secret, a plaintiff must take reasonable precautions to maintain secrecy.
     
    Example - Plaintiff, XYZ Corporation, is seeking damages for trade a secret violation.  XYZ was building a new facility to house a secret device.  Defendant, ABC Corporation, viewed the secret device by flying over the plaintiff's facility in a low flying aircraft, prior to construction of a roof on the facility.  Despite the fact that the defendant was able to view the secret information from public airspace, the plaintiff is likely to be found to have provided reasonable protection of the secret device.  And the device is likely to be treated as a trade secret.
     
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2. Determining if a Trade Secret violation has Occurred - after it is determined that a trade secret exists, it is necessary to determine whether divulgence or acquisition of the trade secret was a violation of the trade secret laws.  Included below are some circumstances involving violations of the trade secret laws.
 
 B) Unlawful Divulgence of a Trade secrets - to be held liable for an unlawful divulgence of a trade secret, an individual must have an "obligation" to maintain the trade secret.  The following are examples of circumstances that give rise to an obligation of secrecy.  A violation of such an obligation is a violation of the trade secret laws.
    I) Breach of a Duty of Confidentiality - if the person divulging a trade secret has a duty of confidentiality, divulgence of the trade secret is a violation of the law.  A duty of confidentiality may arise from explicit agreement or implicit agreement.
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 7. Patents and trade secrets compared - because subject matter that is appropriate for patent protection is also appropriate for trade secret protection, it is essential to understand the benefits and drawbacks of trade secret protection, relative to patent protection.  While the selection between patent protection and trade secret coverage may be clear in some circumstances, it may be a difficult decision in other circumstances.  (See trade secret warning.)
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Patent Law Fundamentals | Trade Secret Module | Patent Awakenings Situational Analysis

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