What Creators Should Know About Trade Secrets

For most client relationships, you and your client will protect your confidential information using confidentiality provisions in your client agreement. However, there are also state and federal laws that can be used to trade secrets (a type of confidential information). In this post we will explore some of the critical things creators should know about trade secrets.

What constitutes a trade secret?

Generally speaking, a “trade secret” is information that you (a) reasonably attempt to maintain as confidential; and (b) is valuable due to its confidential nature. Practically all kinds of information can be protected by trade secret laws including technical data, non-technical data, formulas, programs, methods, lists, presentations, and more.

How do you protect trade secrets?

The key to protecting your trade secrets is to take reasonable actions to maintain the confidentiality of the information. Here are a few tips on how to do that:

• Limit the number of people who have access to the information. You can do this with physical barriers such as walls, doors, or even safes. And for digital information, you can use passwords, firewalls, and encryption.
• “Stamp” the information as “CONFIDENTIAL” (although that isn’t a prerequisite for protection).
• Most importantly, use non-disclosure agreements (or a confidentiality provision in your agreement) with everyone that has access to your confidential information – including employees, contractors, clients, and others.
• (Unlike copyrights, trademarks, and patents, there are no registration options for trade secrets.)

Once you obtain trade secret rights, the protection will last for as long as you maintain the confidentiality of the information.

What is “misappropriation?”

Once you have a trade secret, you can prevent others from “misappropriating” your trade secret. That means you can prevent them from:

• Acquiring your trade secret without your consent.
• Using your trade secret without your consent.
• Disclosing your trade secret without your consent.

Those rights are quite broad and, if someone is violating your rights, you may have the right to seek injunctive relief to stop them from continuing the violation plus actual monetary damages and sometimes punitive monetary damages.

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Related Guides

There’s so much more to learn! Here are a few related guides you should read:

• IP 101: The four main types of intellectual property
• Copyrights: What creators should know about copyrights
• Copyrights: Who owns your copyright?
• Trademarks: What creators should know about trademarks
• Contract Provisions: Three ways to draft smart IP provisions