Trade Secrets


educated-300x162Trade secret law relates to protecting confidential business information that is both valuable and secret. Trade secrets include valuable information (e.g. a formula, pattern, device, method, technique, or process) that is not generally known in the trade, where information holder makes reasonable efforts to keep secret. Our attorneys at Sparkman + Foote LLP, ensure that our clients understand and comply with the specific legal requirements to qualify for trade secret protection.

Trade secrets are unique in that their protection lies entirely in prevention. Sparkman + Foote LLP can provide you with an understanding of the requirements to qualify your trade secret with protection, and help prevent the loss of your trade secret to others. We provide guidance on how trade secrets affect your other intellectual property assets, and perhaps most importantly, we draft the appropriate contracts and documents to ensure that your confidential business information remains protected under the trade secret law. Rest assured that our attorneys keep abreast of current changes in the law. For example, in 2013, Texas greatly expanded its scope of trade secret protection. We are available to explain how new laws impact your documents, your employees, and your competitors.

Trade Secrets and Other Areas of Intellectual Property Law:

Trade secret law may, and often does, coincide or overlap with other areas of intellectual property law including: trademarks, copyrights, and patent law. We believe that it is critical for our clients to understand these overlaps, and provide comprehensive services related to management of our clients’ intellectual property portfolios. The following provides several examples of how trade secret law can intersect with other areas of intellectual property law:

Trademark Law: A trademark is “a word, name, symbol, or devise, that is used in trade with goods to indicate the source of goods and to distinguish them from goods of others.” A service mark is the same as a trademark, except it is used to distinguish the source of a service, rather than goods. While trademark law is distinguishable from the trade secret law, there is often overlap. For example, the very fact that a company is preparing for a product launch is typically a closely held trade secret. Pre-filing screenings and evaluations when choosing or selecting a trademark may also be a trade secret until a final selection is made, or rights secured for the mark.

Copyright Law: A copyright is a form of protection provided to authors of “original works of authorship.” Copyright law protects works including literary, dramatic, musical, artistic, and other intellectual expressions. Copyright law and trade secret law is not the same; however, copyright and trade secret law often coincides in situations involving unpublished copies, drafts, notes etc. of copyrighted material. Copyright and trade secret protections also often overlap with software. For example, in many cases where copyright infringement is found involving software, the infringing software may have been acquired through theft of certain coding or other material qualifying as a trade secret and owned by the software developer.

Patent Law: Patent law protects ideas as they are embodied in useful, new, and non-obvious inventions. Importantly, to meet the requirements of patentability, an invention must generally be a new and non-obvious improvement over previously discovered or known technology. This requirement (referred to as the “novelty” requirement) requires that the inventor not publicly disclose his own invention prior to the date set forth under patent law, prior to filing the patent application. In this sense, research and development of an invention is usually afforded trade secret protection and is imperative to prevent the loss of a patent.

Protection of Trade Secrets

Sometimes, and particularly in the business partnership or employer-employee context, trade secrets are disclosed during the course of business. Business partners or employers may protect their trade secrets against other partners or employees by having particular documents or contracts drafted and signed. These documents include Non-Compete or Employment Agreements, Non-Disclosure Agreements, and Exit Interview Forms. Our attorneys are experienced in reviewing, counseling, drafting, and negotiating these agreements.

Non-Compete or Employment Agreements: A non-compete agreement protects a company by legally binding an ex-employee from working for a direct competitor for a certain amount of time after leaving the company. This is done with the intention that during the non-compete period, the trade secret may change, or not longer have value.

Non-Disclosure Agreements: A Non-Disclosure Agreement (“NDA”), is a confidentiality agreement that is used to protect a trade secret in the course of business negotiation. The agreement permits you to disclose a trade secret to employees or business partners but forbids the information from being disclosed to third parties. These agreements may be incredibly helpful to inform another party that information they receive is confidential; to define confidential information; and, define how disputes will be resolved in the case that one arises. If a party to an NDA violates the terms of the NDA, the person who holds the trade secret may sue the violator for an injunction and/or damages.

Exit Interview Forms: Exit interview forms can be useful ways to remind an employee, that upon their departure, they must keep the company’s trade secrets and return any relevant information or documents. It is also a way to protect a company if the employee uses the trade secret in new employment.

Trade Secret Enforcement and Defense:

Trade secrets may be defended through civil litigation, and misappropriation of a trade secret could result in criminal prosecution. Sparkman + Foote LLP can counsel you and provide necessary support in your trade secret lawsuit.

Contact: Christina SaundersWill Denham