April 17, 2012
Trade Secrets with Foreign Affairs
On a day to day basis, employees working for large corporations deal with various types of information, client lists, and software. When dealing with all of this “company intelligence” it is important to know that all of these have the capability of being what is called a trade secret. When the phrase trade secret is used it basically refers to any confidential business information which provides an enterprise of competitive edge (World). In order for a piece of information to be considered a trade secret, the company must take reasonable steps to keep it an actual secret and keep all possible outlets disclosed. Companies who leave this information available are at risk at losing millions of dollars in profitability and could lead to worse. It has happened to companies all over the world and it is imperative that a company stay in close contact with all employees and former employees that might have had access to these so called trade secrets.
Parties participating in the use of trade secrets are almost always closely related internally to the company being affected by the secrets. “In more than 90% of trade secret cases in both state and federal courts, the alleged misappropriator was either an employee or business partner of the trade secret owner.” (Milligan) This is why it is so important for companies to take the reasonable steps to keep their ideas confidential. Trade Secrets are protected differently than patents; they do not need registration and are protected without any procedural formalities. (World) Also differently than patents, trade secrets can be protected for an unlimited number of years and this is makes them very attractive for SME’s. (World) Although they can be protected for an indefinite period of time there are still some certain criteria a trade secret must meet to be considered one. “While these conditions vary from country to country, some general standards exist which are referred to in Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property.” (World) The following conditions must be met, “the information must be a secret (i.e. it is not generally known among, or readily accessible to, circles that normally deal with the kind of information in question), it must have commercial value because it is a secret, and it must have been reasonable steps by the rightful holder of the information to keep it secret.” (World)
It is extremely important for companies to be knowledgeable on the topic of trade secrets. The economic value in a trade secret can only be protected by the company so if they do not take the proper steps to protect their secret they would be liable for the loss of the information and no legal steps would be taken to obtain it back. “Virtually all states have adopted a portion of a modified version of the Uniform Trade Secrets Act, which was drafted by the National Conference of Commissioners on Uniform State Laws in 1970 and amended in 1985.”(Quinn) The Uniform Trade Secret Act outlines all of the details and repercussions that come with participating in trade secrets. Trade Secret misappropriation can be understood as a competitive advantage by another company. “According to the Uniform Trade Secret Act, misappropriation is defined as: (i) 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 (ii) disclosure or use of a trade secret of another without express or implied consent by a person who (A) used improper means to acquire knowledge of the trade secret; or (B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was (I) derived from or through a person who has utilized improper means to acquire it; (II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (III) derived from or...