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Builders Need to Know About Trademark Law
If these issues don't yell "danger," you should read this article to find out why they should.
|Trade Secret Law:
by Attorney Stepher Elias
Copyright © Nolo Press 1998
The most important point to understand about trade secrets is that there is no crisp, clear definition of what they are. Rather, the context in which a dispute over ownership of information arises will determine whether a court will treat the information as a trade secret. As a general rule, information that has commercial value and that has been scrupulously kept confidential will be considered a trade secret; the owner of the information will be entitled to court relief against those who have stolen or divulged it in violation of a duty of trust or a written nondisclosure agreement.
In most states, a trade secret may consist of any formula, pattern, physical device, idea, process, compilation of information or other information that both:
Trade secrets often comprise customer lists and other sensitive marketing information. Other specific items that may be trade secrets include:
The one element that these items of information have in common is that they have the potential to make money for their owners if they are kept secret from would-be competitors and are used to make money in the marketplace.
Related terms: business information as trade secret; customer lists; databases as trade secrets; formulas as trade secrets; GATT (General Agreement on Tariffs and Trade); ideas as trade secrets; industrial know-how as trade secrets; industrial secret; methods and techniques as trade secrets; patterns and designs as trade secrets; processes as trade secrets; software and trade secrets.
As mentioned, a trade secret is any information that both benefits a business commercially and is kept a secret. More specifically, when deciding whether something qualifies as a trade secret, courts will typically consider the following factors:
Related terms: competitive advantage; compilation of information as a trade secret; copyright and trade secret law compatibility; head start rule; in-house trade secrets; notice to employees of trade secret; novelty and trade secrets; parallel research; patent application, effect on trade secrets; physical devices, ability to maintain as trade secrets; read-only memories (ROMs) and trade secrets; reasonably precautionary measures to protect trade secrets; source code as trade secret; trade secret, defined; trade secret owner; Uniform Trade Secret Protection Act.
Information that qualifies as a trade secret is subject to legal protection (against theft and misappropriation) as a form of valuable property--but only if the owner has taken the necessary steps to preserve its secrecy. If the owner has not diligently tried to keep the information secret, courts will usually refuse to extend any help to the trade secret owner if others learn of the information.
Some activities that the courts will commonly treat as trade secret theft--which means the owner will be afforded some judicial relief, such as damages or an order preventing use of the stolen information--are:
When a disclosure is considered wrongful, the courts may also consider use of the information wrongful and issue an order (injunction) preventing its use for a particular period of time.
Related terms: accidental disclosure of trade secrets; antitrust law and trade secrets; beta testing and trade secrets; confidential employment relationship; confidentiality agreements; covenant not to compete by employee; disclosure of confidential information; duty of trust; exit interview; Freedom of Information Act, exemption of trade secrets; illegal restraint of trade; improper acquisition of trade secrets; improper disclosure of trade secrets; industrial espionage; infringement of trade secret; loss of trade secrets; maintained as a trade secret; nondisclosure agreement; notice to former employee's new employer; piracy; public domain and trade secrets; public records and trade secrets; reverse engineering and trade secrets; theft of trade secrets; unsolicited idea disclosure.
As with other types of property--such as goods, accounts receivable, patents and trademarks--trade secrets may be sold by one business to another. Most trade secret sales occur as part of the sale of the business owning the trade secret, but that is not mandatory.
If the court finds that trade secret theft has occurred, it may issue an order (injunction) requiring all those wrongfully in possession of the information to refrain from using it or disclosing it to others. The court may also award the trade secret owner money damages to compensate for any monetary loss suffered as a result of the theft. In cases involving willful or deliberate theft, the court may also award punitive damages to punish the wrongdoer. Finally, in extreme cases, criminal antitheft laws may be invoked and the trade secret thief subjected to criminal prosecution.
Related terms: damages in trade secret infringement actions; independent conception, defense to trade secret claim; injunctions in trade secret cases; predetermination of rights in technical data; temporary restraining order; territorial restriction agreements--trade secrets; trade secret infringement action; tying arrangements; unjust enrichment and trade secrets; World Intellectual Property Organization (WIPO).
If you're interested in preparing your own trade secret protection contracts for software, you may want to consult this Nolo Press resource:
PLEASE NOTE The information presented at MarketingToday is not legal advice, MarketingToday is not in the business of legal information, we are not lawyers, just publishesr. We provide this information to help you understand the issues that we believe marketers should be aware of. We recommend that you consult a qualified attorney who specializes in trademarks, copyrights, advertising, intellectual property and the Internet for your questions or problems, we do.