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Trade Secrets

At the law firm of Sanders & Parks, our attorneys are committed to helping you protect your intellectual property. In addition to offering you assistance in protecting your ideas and creations, we want to offer you guidance on how to maximize their value. Our lawyers have been helping people in Phoenix, Arizona, and nationwide for more than 30 years. From intellectual property registration to intellectual property litigation, our experience can work for you.

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Trade Secrets

The protection of trade secrets is essential to the health of countless businesses. A trade secret is business information such as a formula, pattern, method or device that has the potential to provide financial gain for its owner. The secret is kept confidential because it is the secrecy that gives its owner the advantage over other businesses. Generally, employees with access to trade secrets have a duty not to disclose them in a way that harms the owner. Unlike patented items, trade secrets do not need to be registered with a federal agency to be protected. Indeed, if trade secrets were registered as patents, they would be available to the public — and no longer secret. The owner of a trade secret should take reasonable measures to protect it. Seek the advice of an attorney from Sanders & Parks, P.C. in Phoenix, AZ, to protect your intellectual property interests.

When Is Confidential Business Information a Trade Secret?

Through statute and case law, the criteria for identifying trade secrets have evolved. The level of protection given to confidential business information is dependent upon whether the information is easily available to competing firms through legitimate means. Similarly, the resources the owner of the alleged trade secret invested in developing the secret helps in the determination. The more likely it is that the information would provide a commercial advantage to competitors, the more likely it is to be considered a trade secret. The owner of the information must make reasonable efforts, considering the circumstances, to protect the secret. This may mean imposing extreme restrictions on which employees have access to the information, or it may mean merely not disclosing the information in a public setting. It depends on the facts in question.

A court typically will look at all relevant aspects of the information's development, confidentiality and profit potential in deciding whether it should be protected as a trade secret.

Misappropriation and Disclosure of a Trade Secret

The misappropriation of a trade secret can transpire in several ways. It occurs when someone acquires the secret through improper means and then uses it inequitably. "Improper means" includes theft, espionage and breach of confidence. Using the trade secret "inequitably" can include integrating the information into a manufacturing process or selling the information to a competitor of the owner. It can also occur when a third party knowingly acquires the secret from someone who is improperly disclosing it, or even disclosing it by mistake. If the third party acquires the knowledge accidentally, it must not use or reveal the secret.

To succeed in court, the plaintiff must prove that it owned a trade secret; that the secret was disclosed in confidence to someone; that the person then used or disclosed the secret; and that the use or disclosure harmed the plaintiff.

Reverse engineering, which occurs when a product is released to the public and the public is able to detect the formerly secret technology inherent in the product, is not forbidden. The source code of computer software, however, is not considered to be open to reverse engineering.

Remedies for the Misappropriation of Trade Secrets

The owner of a misappropriated trade secret may seek an injunction and/or monetary damages. At the court's discretion, the plaintiff may be awarded damages for its loss; the defendant's gain; or reasonable royalties. If you have concerns about trade secret law, a lawyer with Sanders & Parks, P.C. in Phoenix, AZ, can help.

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DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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