Theft of trade secrets can be a very serious offense for an individual or business. There are laws in place that protect small businesses and corporations from having their trade secrets exposed. But the definition of “trade secret” can vary. In order to determine that theft of trade secrets has happened, a prosecutor must first prove that the stolen information was a trade secret in the first place.
This law offers a wide range of protections. However, it will not extend to corporations or small businesses that do not safeguard their information. On top of this, businesses cannot consider every confidential piece of information a trade secret.
Trade secrets might include data, graphs, drawings, and documents that show confidential information about the business. There are a variety of things that have been defined as trade secrets in the past:
Not every bit of information that falls into one of these categories will qualify as a trade secret. In order to count as a trade secret, there must be two elements to the knowledge:
The value of the information is a huge element. The business would need to be damaged if other people found out about the information. It needs to be a valuable aspect of your business that gives you an advantage over your competition. It should not be something that can be easily intuited or researched by the public. If the information can be found by your competition or looked up using a public database of your business records, then you can’t protect it as a secret.
Now, if you want your information to qualify legally as a secret, then you need to treat it like a secret. That is to say, you need to make an effort to ensure that the secret remains confidential. The methods you use to do this will vary depending on the business and the information. It might be something like having employees sign non-disclosure agreements. It might also involve having strict protocols in place regarding who is allowed to access the trade secret information at any given time.
You have to prove that the secrecy makes your information valuable. You will need to answer two important questions.
The first question is if a competitor would find the information valuable. Would it give them an advantage in your industry? Would it take away some of your advantage?
The next question is whether the information can be readily accessed by your competition or the public. You might think that all of your proceedings are confidential, but this element is actually quite hard to prove.
If your competition would be given a financial advantage by using the information, then it has value due to its secrecy. You might also take into account how long it took to procure and hone the information in a way that is beneficial to your business.
Part of the reason that the second question is so hard to answer is because there is a great deal of debate over what constitutes “generally known” knowledge. This debate makes up the majority of most back-and-forth when trade secret lawsuits are filed.
From a realistic perspective, if someone is given the right amount of time and puts enough effort into the project, they can learn whatever they want. There is an exception for formulas that are extremely complex and secret, like the formula that goes into Coca Cola. In addition, there’s no way for someone else to find out about your key business strategies beyond basic guessing.
But information doesn’t have to be completely secret to be protected. It can also be protected if it isn’t known in “general.” So the question then becomes how hard the competition would have to work to figure out the information.
The more you or your business has invested into the information, the more likely it is to qualify for protection. If you’ve spent time and energy putting together this information for yourself, you should be protected from having it stolen.
One example would be if you have a list of leads and existing clients that took hours and extensive marketing to create. This is a valuable piece of information that’s integral to your future marketing strategies. It is also something that can be protected, since you procured it specifically for your business.
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