By Gina C. Carter of Whyte Hirschboeck Dudek S.C.
When determining how to protect intellectual property (IP), it can be difficult to decide between trade secrets and patents. To best understand the options, it is useful to recognize the differences between trade secrets and patents, the varying legal and business factors that come into play, and the remedies available should a third party misuse protected IP.
Trade Secrets Defined
Trade secret law developed from state common and statutory laws, and aims to avoid misappropriation of valuable business information. Under the Uniform Trade Secrets Act, trade secrets:
- are "information, including a formula, pattern, compilation, program, device, method, technique or process";
- are not generally known or ascertainable by the public;
- derive economic value from being held secret; and
- are protected from disclosure with reasonable efforts.
This definition protects a broad range of information. To identify a trade secret, businesses should consider how well the information is known, or could become known, to employees and outside businesses; the steps taken to protect its secrecy and value; the costs associated with developing it; and how easily third parties can recreate or copy it.
A trade secret is created when a company identifies valuable information and makes reasonable efforts to protect it. Protection begins immediately and lasts indefinitely u...