Intellectual Property – Trade Secret
What is a trade secret? A trade secret is your “know-how”. Now you can always protect your know-how as “confidential information” (see my previous entry on Intellectual Property – Confidentiality), so why do we need a separate discussion? Because for information to qualify as a trade secret it has to meet certain criteria. Of course, these criteria vary from jurisdiction to jurisdiction – BUT, here are some common characteristics: (i) not generally known to the public (hence the parallel with confidential information); (ii) reasonable measures must be taken to protect its secrecy (leaving a copy on your desk won’t qualify – even if you do lock the offices at night); and (iii) it confers some sort of economic benefit on the holder by not being generally known (think of the formula for Coca-Cola). As a general rule, you should always rely on trade secret protection – unless, of course, you can’t. For example, while you can license and customers can enjoy your software product without access to the source code (No Reverse Engineering Allowed!), you might find your customers won’t license your proprietary stock index if they don’t understand how it works. Maybe more importantly, trade secret protection should be used to keep the special knowledge of your employees from getting into the hands of your competitors (e.g. client lists, marketing strategy, etc). This can be accomplished through non-disclosure agreements, non-compete clauses and similar protections – more to come on this topic.
Next installment, Intellectual Property – Trademark or Service Mark, and remember, ALWAYS CONSULT AN ATTORNEY FIRST.