Trade secrets have recently become a more popular form of intellectual property protection for several reasons. These include the pervasiveness of trade secrets and their wide range of eligible items, the uncertainty inherent in the patent application process and the reluctance to disclose one`s own “secret sauce”, the possibility of permanent protection under the Trade Secrets Act and the existence of stricter trade secret laws, such as the federal cause of action under the DTA. In accordance with section 1832 (a) of the Industrial Espionage Act, the misappropriation of a trade secret used in interstate or foreign trade may result in fines or imprisonment. There is no uniform definition of the term “trade secret” because the Trade Secrets Act has evolved at both the state and federal levels. Historically, the protection of trade secrets has been a matter of state law, with each state developing its own definitions and rules. This changed in 1979 when the Uniform Law Commission issued the Uniform Trade Secrets Act (“UTSA”) to standardize trade secrets law in all states. Forty-eight states, the District of Columbia, Puerto Rico and the United States Virgin Islands have so far passed the Act and its subsequent revision. The UTSA functioned for many years, but difficulties in intergovernmental and international application eventually led the federal government to act. In 2016, Congress passed the Trade Secrets Defense Act (“DTSA”), which included its own definitions. One of the main reasons why trade secrets law is on the rise is the flexibility and scope of protection it offers. Trade secrets law can protect a wide range of issues that do not fall within the scope of traditional intellectual property systems.

Patent law protects, for example, objects that are limited to a composition, a production process, a machine, a tool, a new plant species or a development of an existing invention. 35 U.S.C§ 101. Many of the most important inventions of this era are difficult to patent, including algorithms, correlations, and systems and methods based primarily on them. In some circumstances, the misappropriation of trade secrets is not only a crime; it is a federal crime. All three elements are required; When an element ceases to exist, the trade secret also ceases to exist. Otherwise, there is no limit to the term of protection of a trade secret. “Innovators, manufacturers and entrepreneurs of all kinds will greatly benefit from a civil case of action in federal courts – a more unified way of acting and stronger resources to prevent trade secrets from moving out the country,” said Michelle Lee, Under Secretary of Commerce for Intellectual Property Trade and Director of the U.S. Patent and Trademark Office. Customer lists and other lists related to the client company are eligible for trade secret protection if the information contained in the lists cannot be obtained from other generally available sources. In Der Rechtssache Morlife Inc.c. Perry, 56 Cal. App.

4th 1514 (1997), the California court ruled that the identities of customers on an organization`s list are protected as trade secrets if the identities of the industry are not widely known. The court also found three factors useful in determining whether it is a trade secret: the Industrial Espionage Act, 1996 criminalizes commercial theft in two circumstances. Industrial espionage refers to the theft of a trade secret “that intends or knows that the crime will benefit a foreign government, instrument or agent.” The second offence – theft of trade secrets – concerns theft “which relates to a product or service used in inter-State or foreign trade or intended for use in inter-State or foreign trade, for the economic benefit of a person other than the owner of that trade and who intends or knows that the infringement will harm an owner of that trade secret”. These crimes are prosecuted by the Ministry of Justice and are punishable by imprisonment and/or fines. Coca-Cola`s secret formula. Special McDonalds sauce. Google`s search algorithm. Bumbles dating software. This proprietary information is essential to the survival of these companies and is one of their most valuable corporate values. Everyone is protected as a trade secret. Although patent law provides strong protection for proprietary inventions, obtaining a patent requires determining that the invention is new, non-obvious and patentable. It also requires disclosure of the invention itself in the patent application.

And while patents last twenty years, they don`t last forever. In contrast, trade secrets provide another way to protect a company`s intellectual property, keeping inventions secret and possibly protected forever. A potential defendant who has been threatened with trade secret misappropriation should consider their policy options: if the defendant has a preference for federal court, they should consider a preventive measure by filing a declaratory action to obtain a statement under federal and state law. Sometimes information protected as a trade secret can also be protected as an invention under a patent. However, to obtain a patent, you must publicly disclose how an invention can be reproduced. Patent protection is a limited monopoly for a certain period of time, while trade secret protection continues until the trade secret is publicly disclosed. The same invention cannot obtain protection for a patent and a trade secret at the same time. Trade secret protection is a complement to patent protection.

Patents require the inventor to provide detailed and possible disclosure of the invention in exchange for the right to exclude others from the practice of the invention for a limited period of time. Patents expire and, when this happens, the information they contain is no longer protected. However, unlike trade secrets, patents can protect against independent discovery. .