Technology and Trade Secrets



What is a trade secret?

A trade secret, according to the Espionage Act of 1996, is defined as any form of information pertaining to business, finances, technology, science, economy or engineering and is capable of being stored graphically, electronically, photographically or in writing. Trade secrets generally involve any form of information that is not publicly known and grants some type of advantage over the general public to the owner.

Possible trade secrets

  • Patterns
  • Programs
  • Codes
  • Procedures
  • Devices
  • Compilations
  • Prototypes
  • Techniques
  • Methods

Protecting trade secrets

Since trade secret by definition is any form of information that is not widely known, the owner has to take the necessary action and effort to maintain that the information remains unknown. Efforts may consist of restricting the amount of employees that may have access to the secret, clarifying the legal consequences of distribution the company’s trade secret and importance to the employees. Below you will find the most common safeguard practices a company may use in order to protect their secrets:

  • Building access controls
  • Escorting visitors
  • Marking sensitive documents
  • Non-disclosure agreements
  • Shredding material when no longer needed

Marking trade secret information

Through proper markings, law enforcement requires that any trade secret information be clearly and specifically identified. It is up to the company to decide how this type of information should be marked. Typically the phrases “company sensitive” or “company proprietary” are used to identify trade secret information.

When dealing with the solicitation of bids, in order to protect the information, it is required by the government to inform any potential contractors on how the trade secret information must be marked. Therefore, every title page and any page containing secret information must be properly marked and identified as well.

Law enforcement

Sharing trade secrets is considered a federal criminal offense. There are two separate provisions under the Economic Espionage Act that pertain with theft or misappropriation of trade secrets. Foreign economic espionage is mentioned within the first provision, requiring that the theft lead to a benefit of a foreign government. The second provision governs trade or commercial theft, despite of who benefits from it.

As a result, if any person is convicted of any form of economic espionage they can be incarcerated for up to 15 years and fined up to $500,000, or even both. If a person is convicted of commercial theft they can be sent to prison for up to 5 years and fined up to $100,000. If a corporation is convicted of these crimes the fines can reach upward towards $10 million.

Protecting your trade secrets

Company information is very important; especially the information that is crucial to capacity and economic growth. These are important assets and possess considerable value. It is vital to keep your trade secrets safe and well protected.

If your have any questions regarding trade secrets or if your company’s secret information has been stolen and traded, please contact one of our Trade Secret attorneys immediately.

This article is provided for informational purposes only. If you need legal advice or representation,
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