201710.02
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When It Looks Like You Need to Protect Trade Secrets

You may already have some idea as to what constitutes trade secrets. For certain, if you’ve developed a particular product or formula, you’d like credit for it. After all, whatever you’ve come up with is tied to the success of your business. So, what precautions should you take to protect your company’s trade secrets?

Need an example of a well-kept trade secret? Look to Colonel Sanders and his “finger-lickin’ good” brand of fried chicken. Kentucky Fried Chicken, now branded as KFC goes through great care to keep their recipe securely guarded. The Colonel’s original handwritten list of ingredients is literally locked away. And, the trusted employees who know it are legally bound by a confidentiality agreement.

Most recently, the Texas legislature updated the law as it pertains to the protection of trade secrets. Let’s take a look at some key features that may relate to your company and its concerns.

Texas Law and Trade Secrets

Under the Texas Code, trade secrets are addressed in the Texas Uniform Trade Secrets Act. Last month, some important changes were made to the act, also known as TUTSA. Rather than point out the differences, we are providing you with some key components of the law as it exists today. To begin with, the following are considered information that may constitute trade secrets:

  • Formula
  • Pattern
  • Compilation
  • Program
  • Device
  • Method
  • Technique
  • Process
  • Financial data
  • List of actual or potential customers or suppliers
  • Business, scientific, technical, economic, or engineering information
  • Design, prototype, plan, program device, code, and procedure

The amended code further states that any of these items may be considered trade secrets “whether tangible or intangible and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing.”

Securing Trade Secret Protection

Other portions of TUTSA have changed. However, many deal with redress if your trade secrets are revealed. The bottom line is working on protecting them in the first place. How is that accomplished?

First, an experienced intellectual properties lawyer can provide legal counsel concerning the protection of your company’s trade secrets. For starters, you should know the difference between patents, trademarks, and trade secrets. Both patents and trademarks are registered. Therefore, the approach to protecting trade secrets is quite different.

As a matter of business, employees should be required to execute non-disclosure agreements and have a clear understanding of the sensitive nature of their work. Confidentiality agreements may also be used with outside consultants who may become privy to trade secrets.

Your company will also need to have policies and procedures in place that address protection of your business’s trade secrets. How will the information be stored? Have you labeled it as confidential?

When all is said and done, the next step will be understanding how to proceed if someone does reveal your trade secrets. It will be important to prove that you have made “reasonable efforts” to protect them. A misappropriation of trade secrets is surely a reason to seek a temporary restraining order.

Contact Us

Your company’s trade secrets are an important part of your business. Contact Manfred Sternberg and Associates to see how we can help you protect them.

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