Trade Secrets
Trade Secrets are a type of intellectual property that can be of great value to the owner over a period of years. For something to be a Trade Secret, it must be kept secret. Public disclosure of a Trade Secret destroys the value of the Trade Secret.
Depending on the circumstances associated with the Trade Secret, federal (18 U.S.C 1831-1839), State or common law may determine the rights of the owner of the Trade Secret. 18 U.S.C 1831-1839, for instance, has both criminal and civil provisions.
Forty-eight of the 50 States have adopted the Uniform Trade Secrets Act (UTSA) which became the law of those States.
Definitions of Trade Secrets
U.S.C. 1939 (3) reads:
“…(3) the term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—
(A) the owner thereof has taken reasonable measures to keep such information secret; and
(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information;…”
The UTSA defines “trade secret” as:
“”Trade secret” means information, including but not limited to, a formula, pattern, compilation, program, device, method, technique, or process, that:
- Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and
- Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
What is misappropriation?
18 U.S.C. 1939 (5 & 6) read:
“(5) the term “misappropriation” means—
(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(B) disclosure or use of a trade secret of another without express or implied consent by a person who—
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was—
(I) derived from or through a person who had used improper means to acquire the trade secret;
(II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or
(III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or
(iii) before a material change of the position of the person, knew or had reason to know that—
(I) the trade secret was a trade secret; and
(II) knowledge of the trade secret had been acquired by accident or mistake;
What are Improper Means?
(6) the term “improper means”—
(A) includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means; and
(B) does not include reverse engineering, independent derivation, or any other lawful means of acquisition;…”
The UTSA Defines “Improper Means” and “Misappropriation”
(1) “Improper means” includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means;
(2) “Misappropriation” means:
(a) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(b) Disclosure or use of a trade secret of another without express or implied consent by a person who:
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- Used improper means to acquire knowledge of the trade secret; or
- At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was:
- Derived from or through a person who had utilized improper means to acquire it;
- Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
- Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
- Before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
If your company needs assistance protecting its Trade Secrets, please contact Business Patent Law, PLLC.
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