Can You Keep A Trade Secret?
Brian D. Martin
Senior Associate
&
Anthony G. Smyth
Associate
Pillsbury Winthrop Shaw Pittman
12255 El Camino Real, Suite 300
San Diego, CA 92130
619-234-5000 (telephone)
858-509-4010 (facsimile)
brian.martin@pillsburylaw.com
anthony.smith@pillsburylaw.com
2
Intellectual Property
• Copyrights
• Patents
• Trademarks
• Trade secrets
3
Trade Secrets
• A trade secret is secret information that gives its
owner a competitive advantage
• The owner of a trade secret must take
reasonable steps to maintain secrecy
4
Candidates For Trade Secret Protection
• Designs and chemical formulas
• Manufacturing processes
• Computer programs
• Customer and vendor lists
• Pricing and financial information
• Business plans and forecasts
Examples include:
5
Advantages Of Trade Secrets
•
Indefinite in duration
• Do not have to be patentable
• No requirement for public disclosure
• Can be relatively inexpensive
6
Disadvantages Of Trade Secrets
• Terminated by inadvertent public disclosure
• Must maintain a trade secret policy
• Governed by state law
7
Disadvantages Of Trade Secrets (cont.)
• No protection against independent developers
• Others may extinguish trade secret
• Others who develop may patent
8
Contrast With Patents
• Grants exclusive rights
• Provides defined licensing vehicle
• Protects against reverse engineering
• Allows early publication
• Provides federal court remedy
Attributes of a patent
9
How To Establish A Trade Secret
• Mark and control confidential documents
– e.g., “Confidential and Proprietary Information of XYZ Inc.”
•
Inform employees (and other recipients) exactly what
information is to be treated by them as confidential
– Do not designate general categories - specific and periodically-
updated identification is required
•
Log in and escort visitors
•
Limit access to people who have:
– need to know sensitive information
– need to access facilities housing research, process and other
proprietary activities
– have signed a non-disclosure agreement or “NDA”
Take active measure