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Trade Secrets FAQs

What is a trade secret?

Basically, a trade secret is any information that a business collects which gives it an edge over its competitors. It can be a formula, pattern, compilation, program, device, method, technique or process. The point about the information is that it must be kept "secret." Once it is generally known, then the originator of the trade secret has no claim against anyone else who uses it. Many states have laws which protect trade secrets that are based on the Uniform Trade Secrets Act.

What must you do to protect your trade secrets from misappropriation?

A misappropriation occurs when someone acquires the trade secret from another, knowing it to be a trade secret and using improper means to acquire it. As the owner of the trade secret, you must take reasonable steps to keep it secret. Therefore, you may disclose it to those who have a duty to keep the secret, for example to your employees who have a "need to know" and those who have signed a confidentiality agreement. But otherwise, you must avoid letting the information become generally known.