Tricks of the Trade(secrets)Part 3

Categorization of trade secrets assumes that most kinds of business and technical information are eligible for this status. No information automatically qualifies as a trade secret until certain safeguards are in place and enforced. However, assuming any given information is a trade secret, categorization facilitates its recognition as such, as well as comparison to protection and downsides of United States patent and copyright registration.

The first category contains business information of all kinds and sizes. The first kind that comes to my mind during a client interview is the customer list. Running a close second and third are the preferred vendor list and the business’ office infrastructure respectively. Referring again to our example of the Illinois Trade Secret Act, it was not until its passage in 1988 that protection of customer lists became the uniform law throughout the state. Prior to that date, protection of customer lists as trade secrets, and compensation from the usurper on that basis, depended upon the judge who heard your case and perhaps the district that reviewed your appeal!

Customer lists can consist of either (i) identifying information of specific persons or entities; or (ii) an anonymous group within a targeted sales niche. By anonymous we mean identification of trends and characteristics of the market that are necessary for sales and to motivate customers to return. If confidentiality requirements are otherwise met, either kind of customer list, as well as preferred vendors lists are eligible for trade secret status in Illinois.

In addition, business methods and office infrastructure should be protected “early and often” now that most business methods are no longer patent eligible in the United States. Courts have held that projected business earnings and sales, as well as business plans and strategies are eligible for trade secret status. Specific information that courts have found eligible for trade secret protection includes: future customers, potential market areas, future marketing strategy, price books, retail and “route” customers, ” and business infrastructure computer software,

The second category is methods for manufacturing and production. This category includes methods for providing services if that is the subject matter your business provides. If the machinery for these methods is hidden from the public, and is only available to employees on a need to know basis, then the machinery is eligible for trade secret status. This may mean that the method itself is also confidential. However, it may also mean that your machinery provides the most economical, energy efficient, safe, or “green” manner in which to practice a method that may not otherwise be patentable. In either case, the machinery to implement a best method or only method is eligible for trade secret status.

The third category, and the one that initially comes to mind to most people, is product technology and composition. This category includes, although not exclusively, chemical solutions and formulas, as well as specifications, blueprints and drawings for current products. It also includes this information for products sold in the past or to be sold in the future. Surprisingly, even though a product is described in a published patent application or patent, there may be information related to the disclosure but not disclosed, and that can qualify as a trade secret!

© 2010 Adrienne B. Naumann

Ms. Naumann does not sponsor or endorse the advertisements at adriennebnaumann.wordpress.com

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