The Trade Secret; a new IP Star
Many businesses thrive off of their intellectual property consisting of patents, trademarks, and copyrights. However, a new IP star – the trade secret – is quickly on the rise.
Due to advancements in technology and an ever-changing market, trade secrets play a vital role in many businesses. By establishing information as a trade secret, businesses who fall victim to misappropriation of their trade secrets can seek redress in the court system. Available remedies include both injunctive relief and monetary damages, which can amount to very large sums of money.
In practice, trade secrets can include manufacturing techniques, business plans, client lists, computer algorithms, or even a new invention for which a patent application has yet to be filed. There are two key factors in determining whether an idea, document, formula, or invention qualifies as a trade secret:
- It must derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
- It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Courts place particular emphasis on the second factor – keeping the information secret. Thus, it is critical for businesses to take proper precautions to maintain the secrecy of their trade secrets, or they risk losing the ability to protect them in court. While businesses do not have to go to extreme measures to protect their trade secrets, they still must make reasonable efforts. Such efforts may include:
- Limiting accessibility to trade secrets to need-to-know employees only and ensuring that those employees are specifically informed of the information’s confidential nature;
- Executing confidentiality and non-disclosure agreements with third parties that reasonably describe the information considered to be trade secrets and the value of such to the business; and
- Seeking counsel before producing any information that may contain trade secrets in response to a subpoena or court order. Counsel can ensure that a business’ trade secrets are shielded from disclosure through the use of protective orders.
The responsibility of establishing and protecting trade secrets is ultimately on the business. However, by being vigilant and proactive, a business can effectively protect its trade secrets without spending a substantial amount of time or money.
 See Ohio Revised Code §1333.61