What Questions Should You Ask When Considering Trade Secret Protection?

Should I Get a Trade Secret?

There are four critically important questions to ask when considering whether to pursue Trade Secret protection.

The first question is whether or not the information is proprietary to you. If not, if you do not own the information, it is not your trade secret. Now, having said that, perhaps the owner of the information can (or already has) taken all the right steps to secure enforceable trade secrets rights on the information you have. For example, the owner of that information might have the right secret-keeping infrastructure in place and disclosed that information to you under the right non-disclosure agreement. If so, the owner of that trade secret can grant you a license to their trade secret rights. But, again, for you to be the owner of a trade secret, you must have proprietary rights to that information.

Second, if it is proprietary to you, does this information give you a competitive advantage as long as you keep it secret? If so, your potential trade secret rights are still alive…depending upon how you answer the remaining questions.

Third, does the competitive advantage you gain by keeping the information secret outweigh the administrative burden of keeping it as a trade secret? In other words, it can be time consuming and expensive to build the secret-keeping infrastructure you need to maintain an enforceable trade secret. Is it worth it? Is the trade secret valuable enough to justify spending that time and money?  

Fourth, and most importantly, can you actually keep it secret?  Because if you cannot keep it secret, trade secret protection is not worth considering.  So, do you have an environment where this information can be kept secret?  And if so, is the secret such that it can be discovered by reverse engineering as soon as you get to market? In other words, even if you can and do keep it secret internally, can someone discover it by buying and tearing apart your product? If so, your trade secret will not last long. Which means you might want to consider patent protection instead.

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