Trade Secrets
Walker & Jocke wrote the patents that cover the software security features that are the industry standard for protecting customer data input to automated teller machines.
What is a Trade Secret?
A trade secret is generally something that is not known or readily discoverable that gives the owner an advantage in its business activities. A trade secret may be business information, such as customer lists, business or marketing plans, lists of suppliers and/or ideas or plans for business expansion. Products and product information may also be protected as trade secrets, including formulas, manufacturing methods, software code, maintenance techniques and manufacturing methods.
The essential requirement of trade secret protection is that relative secrecy be maintained. This requires that people not be provided with the information, unless they are under an obligation not to further use or disclose the trade secret.
Advantages of Trade Secret Protection
Trade secret protection sometimes has advantages over other types of protection, including patents. Patents may last for a maximum of 20 years. Trade secret protection may last as long as the information remains secret. Trade secret protection also typically costs less to maintain.
Disadvantages of Trade Secret Protection
A major drawback of using trade secret protection is that care must be constantly exercised to ensure the confidentiality of the secret. Even one inadvertent disclosure of the information may result in the loss of trade secret protection.
Further, anything that can be readily discovered by “reverse engineering” cannot be protected as a trade secret.
Developing a Protection Program
The effective protection of trade secrets usually involves developing a program to ensure legally effective protection. An attorney experienced in trade secret law would tailor the protection program to the particular situation.
Some elements of trade secret protection programs include:
Employee confidentiality agreements
Non-compete agreements with key employees and consultants
Non-disclosure agreements with suppliers and vendors
Restricting access to computers and manufacturing facilities
Controlling access to facilities by visitors and consultants
Restricting use and disposal of documents, materials and equipment
Designing products to make reverse engineering difficult
The steps that may be required to have effective trade secret protection will depend on the nature of your business and the type of information you need to protect.
Intellectual Property Audits
Many businesses only think about protecting their patents, trademarks, copyrights or trade secrets after they have encountered a problem. It is much less costly to have a plan for protection of your valuable “intellectual property” so that problems can be avoided.
One approach to avoiding problems is to have an “intellectual property audit” conducted. An intellectual property audit involves having an attorney experienced in intellectual property review the business activities and the protection you currently have. Such reviews usually uncover areas in which protection can be improved at a very low cost. Just like an annual physical checkup by a doctor, an annual review of intellectual property protection may avoid serious problems later.