At our law firm, we help Kentucky entrepreneurs, small and family businesses, professional practices and medium- to large-sized corporations to protect their intellectual property portfolios from misappropriation in the marketplace. These key business assets may include patents, trademarks, service marks, copyrights, domain names, trade dress and trade secrets – and unique trade secrets can be the basis for commercial success in some businesses.
What are trade secrets?
Very broadly, major trade secret laws say that it is any type of business information that the owner keeps confidential and that has current or future “independent economic value” because it is a secret asset of its owner. A trade secret might be a formula, process, design, prototype, program or code, compilation (like a customer list) or any of a number of other similar secrets used as a component of commercial success.
How can you protect trade secrets?
Legal tools to protect trade secrets include carefully drafted confidentiality and nondisclosure agreements with employees and licensing agreements with third parties. There are also many practical ways to layer in protections like locking trade secret material behind passwords and security walls when electronic and physically when appropriate as well as limiting which employees, contractors or licensees can access the details.
Company policies and expectations of keeping trade secrets confidential can be reiterated at onboarding and offboarding and in periodic training sessions as well as in written policies, employee handbooks and posted notices.
Trade secret litigation
But when the cat gets out of the bag and a competitor or ex-employee gets their hands on a trade secret, litigation can be a good choice. Through a lawsuit, the trade secret owner may be able to negotiate a settlement that includes relinquishment or destruction of misappropriated material or data, or a fair licensing agreement, depending on the circumstances.
Sometimes getting to court for a preliminary injunction to protect the secret before a wrongdoer can cause further harm can be crucial. For example, the court could order disgorgement of secrets or that the misappropriator take no action to use allegedly stolen material until the lawsuit settles or the litigation process can proceed to final resolution.
An attorney can provide guidance about potential legal remedies, including lawsuits under the Kentucky Uniform Trade Secrets Act or the federal Defend Trade Secrets Act of 2016 (DTSA).
In part 2 of this post, we will talk about money damages as a remedy for financial losses from stolen trade secrets.