Trade Secrets are Valuable Business Assets
Trade Secrets Are Valuable Business Assets
The formula for Coca-Cola is one of the most highly protected trade secrets in the business world Protection trade secrets like Coca-Cola are very important to any business since it constitutes a valuable asset of the company.
Filing a copyright or trademark does not alone protect trade secrets since the information must be disclosed to the governmental agency in order to be submitted for trademark or copyright. Rather, the law has set up a separate way of privately dealing with protection of your valuable information without any governmental involvement. Illinois has adopted a law which helps business owners protect their trade secrets. The Illinois Trade Secrets Act (ITSA) has been in effect since 1988 and governs civil lawsuits for misappropriation of trade secrets.
The initial question every business owners asks is "What is a trade secret?" Generally, a trade secret is any information that:
- Is sufficiently secret to derive economic value, actual or potential, from not being generally known; and
- Is the subject of reasonable efforts to maintain its secrecy or confidentiality.
Trade secrets can be anything from a customer list, formula, technical drawings, quality control procedures, cash management techniques, human resource policies or anything else if that information satisfies the elements of a trade secret.
Once a trade secret has been established, Illinois Courts will protect those trade secrets from misappropriation through injunctions, damages from actual loss to the owner, damages from unjust enrichment to the defendant, putative damages and attorney's fees.
There are 3 elements required to establish a claim of misappropriation:
- A trade secret existed;
- The trade secret was misappropriated; and
- The owner of the secret was damages by the misappropriation.
The information sought to be protected must be sufficiently secret to have economic value to the owner's company. In other words, the information must not be "generally known or understood" to receive protection under the ITSA.
The owner of the trade secret must take measures to keep the information secret. This may include physical security, non-disclosure agreements, interviews that stress the importance of confidentiality, and generally taking reasonable steps to protect the information. Simply marking something as "Confidential" may not be enough. Affirmative steps must be taken to keep the information from being disseminated throughout the company.
As experienced attorneys in this area, we have assisted many clients with protecting their trade secrets. Usually our analysis begins by determining the information that the client believes is a warrants treatment as a trade secret. If the client does not want the information to be in his competitor's hands, that that information should be protected somehow. We can then help determine what measures should be taken to keep the information secret. We then help the client establish steps to protect the secrecy through reasonable efforts. Sometimes the only thing that needs to be done is to have confidentiality agreements put into place in employment contracts.
Whatever information you believe should be protected, should be protected. Steps should be taken to keep this information confidential and out of the hands of your competitors. We have helped many clients take steps to protect their trade secrets and have litigated this issue on several fronts over the past two decades.