A top mistake of new entrepreneurs is being unclear on just what constitutes a trade secret. That's precisely why many unknowingly fail to protect their valuable intellectual property. A trade secret can be virtually any information used in the course of your business that lends a competitive advantage and is not generally known within your industry or trade.
Trade secrets can include proprietary formulas, processes, methods or techniques; research and development information; product or service pricing policies; product designs; facility blueprints; computer programs; client, vendor and materials lists and more. But there are three general criteria that must be met in order to claim something as a bona fide trade secret:
- Information must not be common knowledge.
- Information must have demonstrable value that lends your company a competitive edge.
- Information must be protected and maintained as confidential by you and your company.
Properly claiming and protecting your company's trade secrets affords you the sole right to use and disclose them via contractual or confidential business relationships. Trade secrets are governed by individual state law rather than federal law, so you'll find some variations from state to state. In any case, trade secret rights generally are considered property rights that can be assigned, licensed, transferred or disposed of by contract.
If you need help setting up your new business and protecting or defending your trade secrets, contact a business incorporation and intellectual property attorney with Orlando's Daniel Law Offices at 866-37PATENT.