Trade Secrets Label on Folder

What Protections Does a Trade Secret Have? 

The Parzivand Law Firm, PLLC Oct. 26, 2022

As a business owner, you know what it takes to work hard, see your vision through to the end, and manage a never-ending stream of difficult situations. And, one of the many tasks you’ll have to navigate is how to best protect your creative ideas, intellectual property, and trade secrets. These are all things that are unique to you and your business, and you need to make sure they stay that way.  

Unfortunately, competitors (or even your own employees) will sometimes try to steal your ideas and pawn them off as their own. While you can’t stop every bad actor out there, you can take steps to stop trade secret misappropriation and defend your ideas.  

For help with this and to speak with a trade secret lawyer, reach out to The Parzivand Law Firm, PLLC today to set up a consultation. With offices in Stafford, Texas, they can represent clients throughout the area, including in Sugar Land and Fort Bend County. 

What Qualifies as a Trade Secret?  

A trade secret is a type of intellectual property that has certain protections under federal law much like a copyright, trademark, or patent. However, each of these designations is distinct and can only be used under specific circumstances. The pertinent law was originally enacted in 1979 under The Uniform Trade Secrets Act (UTSA), and this framework has since been adopted by 47 states including Texas.  

A trade secret usually protects a formula, process, idea, physical device, or pattern as long as it meets two criteria. First, it must give the owner a competitive advantage in the marketplace either now or in the future. And second, you must exercise control over your trade secret in a way that your competitors or the public won’t be able to easily access or ascertain what it is.  

For example, if you have a trade secret on a BBQ sauce, you could not list your ingredients on the bottle or on your website for everyone to know. Or, if you’ve developed a new method of manufacturing a product more efficiently, you must take reasonable pains to keep this process a secret and only allow those who need to know the process to have this information. This could be done through employee contracts, workplace protocols, or confidentiality agreements.  

What Protections Does a Trade Secret Have? 

Trade secrets are different from other types of intellectual property in that you don’t have to officially register them with the federal government to benefit from the protections of a trade secret. You only have to show that you’ve met the two criteria listed above. If you can show this, then you have legal standing to take action against anyone who has violated it, and this could include a former employee compromising a trade secret.  

For instance, if the individual worked closely with a protected process, then left to work for a competitor and brought the trade secret with them, they would be in violation of the law. Importantly, the employee or contractor does not have to have signed a non-disclosure agreement (NDA) to warrant legal action against them.  

It can also protect you from those who have stolen your trade secret or those who’ve come across the information by mistake but who should have reasonably surmised that it was protected and supposed to remain secret.  

It’s worth noting there are limits to this law and its protection. If someone else, like a competitor, figures out the information or process that makes your trade secret unique on their own (meaning they’ve not done it through illegal means; rather, through research, their own analysis, or trial and error), you cannot use the USTA to file a lawsuit against them. 

How Do You Prove That Those Protections Were Violated?  

Because trade secrets are not registered with a government entity like copyrights or patents are, the steps to proving that yours was violated will be a bit different and can be much more complicated.  

Because of this, you’ll likely want to work with an experienced attorney who can help you understand the process, what kind of evidence will be needed to mount a successful case, and how to go about filing a claim. You must first be able to prove that your trade secret conferred some sort of market advantage to you and that you took reasonable steps to keep it hidden.  

This evidence will look different for every client but may include sales reports, employee handbooks, copies of NDAs or other confidentiality agreements, or proof that you had access restrictions in place. You’ll then have to prove that this secret was obtained by illegal means or that the person or entity should have known that the information was a secret.  

Diligent & Skilled Legal Advocacy  

If you’re in the Stafford, Texas area, and have any questions about protecting your intellectual property, especially through a trade secret, call The Parzivand Law Firm, PLLC to speak with a knowledgeable attorney.