Protecting Your Trade Secrets

Article excerpt

Does your business have secrets? Does it have secret knowledge such as customer lists, computer programs, manufacturing methods, recipes, codes, or a formula -- such as the one for Coca-Cola -- that gives it an economic advantage over its competitors?

If the answer is yes, then your business assets include trade secrets, a form of intellectual property that can be as important, if not more important, than the patents, trademarks, and copyrights owned by your business. Your business, however, can lose its trade secrets if it does not properly protect them.

Almost anything can be a trade secret. Courts have often applied the following definition for the term trade secret:

"A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to single or ephemeral events in the conduct of the business as, for example, the amount or other terms of a secret bid for a contract or the salary of certain employees, or the security investments made or contemplated or the date fixed for the announcement of a new policy or for bringing out a new model or the like. A trade secret is a process or device for continuous use in the operation of the business. Generally it relates to the production of goods, as, for example, a machine or formula for the production of an article. It may, however, relate to the sale of goods or other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management."

An Oklahoma statute defines a trade secret as follows:

"Trade Secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. …