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Is Your Trade Secret Legally Entitled to Protection?

Litigation By Harvey Binnall PLLC - 2020/01/17 at 12:07pm

Experienced Business Litigation Attorney in Alexandria, VA

Many business owners are confused as to the legal protections granted to trade secrets, and whether their specific “secretive” information will be entitled to such protection.  Under the law, protected trade secrets may not be misappropriated by third-parties — should that happen, the business (that owns the trade secret) will have a right of action for damages.

It’s important to recognize that a trade secret must meet the following criteria to entitle its owner to protection under the law:

  • It must be economically advantageous;
  • It must be confidential; and
  • Reasonable efforts must have been made to keep it secret.

Without further context and explanation, these elements can be difficult to understand, so let’s explore them in a bit more detail.

Economic Advantage

Trade secret information must confer an economic advantage vis-a-vis the competition in one’s industry.  Whether an economic advantage is actually conferred by trade secret information depends on a number of factors, including:

  • The investment and efforts made into the trade secret information itself (i.e., funds spent on developing it and maintaining secrecy);
  • Whether it would be difficult or even impossible for third-parties to independently identify/develop the trade secret;
  • How easy it would be to acquire the trade secret; and
  • Whether the trade secret information is available (to a significant degree) in the public domain.

For example, if you have a trade secret recipe for a dry rub spice mix, but it’s not particularly complicated or unique (i.e., a trained chef could quite easily determine what ingredients are in the spice mix), then the economic advantage conferred may not be sufficient to grant protected trade secret status to the recipe.

Confidential Information

Determining that trade secret information is actually confidential (to the degree necessary to justify legal protection) depends on whether it is generally known or readily ascertainable to the public, or even just to industry competitors.  If your business has a proprietary recipe that is published in an industry circular, then that would very likely be sufficient to undermine its confidential status.

Reasonable Efforts at Secrecy

Businesses must make reasonable efforts at secrecy.  In other words, a business must secure the secret against third-parties to the degree possible.  Importantly, however, secrecy need not be perfect — so long as reasonable efforts are made, that is enough for protected trade secret status.  For example, if an email glitch accidentally leads to a leaked client list, that rare accidental disclosure may not be enough to argue that reasonable efforts were not made to keep the information secret.

Contact Harvey & Binnall, PLLC for Guidance

Here at Harvey & Binnall, PLLC, our team of attorneys have decades of experience working with both plaintiffs and defendants in various business tort disputes, including those centered around the misappropriation of trade secrets.  We are well-acquainted with the unique challenges facing such parties, as well as the power of persuasive argument in defining certain information as a trade secret entitled to legal protection.

If you’d like to speak to an experienced Alexandria business litigation attorney regarding your case, we encourage you to call us at 703-888-1943 or complete an intake form online to schedule a consultation.