A Trade Secret
- is information that has either actual or potential independent economic value by virtue of not being generally known,
- has value to others who cannot legitimately obtain the information, and
- is subject to reasonable efforts to maintain its secrecy.
All three elements are required; if any element ceases to exist, then the trade secret will also cease to exist. There is no limit on the amount of time a trade secret is protected.
Protection of trade secrets
The Department of Justice may punish trade theft by imprisonment and/or fines, if there is:
- Economic espionage – i.e., theft of a trade secret “intending or knowing that the offense will benefit any foreign government, foreign instrumentality, or foreign agent.”
- Theft of trade secrets “that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret.”
A trade secret may also be protected, in state or federal venues, by private civil cause of action. This cause of action provides trade secret owners with a uniform, reliable, and predictable way to protect their valuable trade secrets anywhere in the country.
U.S. courts can protect a trade secret by:
- ordering that the misappropriation stop,
- that the secret be protected from public exposure, and
- in extraordinary circumstances, ordering the seizure of the misappropriated trade secret.
If a court determines that a trade secret has been misappropriated, the court can award damages, court costs, reasonable attorneys’ fees, and a permanent injunction, if warranted.
Trade secrets versus patents
| Trade Secret | Patent | |
| What is Protected | Broadly defined information that has either actual or potential independent economic value by virtue of not being generally known | New and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof, New, original, and ornamental design for an article of manufacture, or Any distinct and new variety of plant. |
| Time of Protection | Unlimited | Approx. 20 years |
| Public Disclosure | No public disclosure. Must maintain secrecy | Must provide a detailed and enabling disclosure about the invention to the USPTO for eventual public disclosure |
| Independent Discovery | No protection against independent discovery | Protects against independent discovery |
The decision on how to protect an invention that is eligible for either patent or trade secret protection depends on business considerations, taking into consideration the relative benefits of each type of IP protection.