The law recognizes the right to be protected against the breach of a duty arising from some special relationship of confidence, such that the disclosure of the trade secret is an unlawful act. Because trade secrets are only protectable from wrongful disclosure or misappropriation, they do not necessarily give the owner the right to exclude others. There is generally no protection against honest, lawful discovery of trade secret information by others through, say, reverse engineering. Despite these risks, in recent years trade secret implementation and related litigation has grown, most likely due to the increased awareness of trade secret law under the widely accepted Uniform Trade Secret Act.
Trade secret liabilities or rights arise from some special relationship between the owner of the trade secret and another party. Examples of such special relationships include the employer-employee relationship, a principal-agent relationship, and a contractual relationship. Factors to consider in determining whether a trade secret exists include:
• The existence of or absence of an agreement restricting disclosure;
• The circumstances under which the information was learned by others;
• The extent to which the information is known to others outside of the owner’s business;
• The extent of the owner’s efforts to maintain the confidentiality of the information;
• The value of the trade secret information to the owner and to his/her competitors;
• The ease or difficulty with which the trade secret information could be lawfully obtained by others without wrongful disclosure or misappropriation; and
• At a bare minimum, the existence of an element of secrecy or originality to the trade secret information. The information must not be a matter of public or general knowledge, and it cannot be completely disclosed by way of examination of the products or services marketed by the trade secret owner.
To find out more please access our IP Primer page.