Trade Secrets

Miami, Florida based intellectual property law attorney assisting clients throughout the State of Florida in protecting their trade secrets

Trade Secret Law

Trade secret law is primarily a creature of state law. Florida’s trade secret law is governed by its Uniform Trade Secrets Act (Fla. Stat. 688). In Florida, the theft, embezzlement, or copying of a trade secret is a third-degree felony (i.e., is associated with a criminal penalty). Fla. Stat. 812.081(1)(c). The trade secret owner also has the right to seek redress in civil court for damages caused by the wrongful usage of the trade secret.

Trade secrets are also afforded protection through the federal Economic Espionage Act of 1996. The law may be applied to offenses outside the U.S. if any act in furtherance of the offense was committed in the U.S. or the offender is a U.S. person or organization.

A trade secret is commonly defined in broad terms as any information, including, but not limited to technical or non-technical data, a formula, compilation, program, device, method, technique, drawing, process, financial data, or a list of actual customers or suppliers that:

1. 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 and use; and
2. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Trade secrets are not just limited to trade secrets already in use, but also include information that is being developed as a trade secret. This means that businesses have remedies available to them if information being developed as a trade secret is misappropriated before the trade secret information has been finalized and is in use (e.g., as a trade secret in a manufacturing process or software code).

It is also important to understand that trade secret protection is not automatic. With a registered trademark, copyright, or an issued patent, the owner has tangible evidence of presumed ownership. The owner of a trade secret must take proactive steps to establish that the so-called trade secret is indeed a trade secret as evidenced by the steps taken to ensure protection of the information.

Why Not Just Get a Patent?

A trade secret does not have a finite lifetime as does a patent. Coca Cola’s® formulation, probably the most famous trade secret of all, has been safely guarded for over 100 years.  Had Coca Cola® instead patented the formulation, the patent would have expired decades ago, and anyone would have been free to sell the same formulation.

Furthermore, the involved subject matter just may not be patentable and therefore the only option is to protect the subject matter/information as a trade secret. Thus the owner of a propriety method of doing business which may not meet the requirements for obtaining a business method patent, could have the option of protecting the method as a trade secret.

It is important to keep in mind, however, that certain types of trade secrets may be independently discovered by reverse engineering. If the reverse engineering occurred without help through illegal/fraudulent means, the trade secret owner would generally have no legal recourse.

Patents, on the other hand, can be enforced during the patent term against someone who independently develops or reverse engineers an invention. Also, because patents are published and are made public, they also provide additional protection – by being prior art so that someone else can’t obtain patent rights in the invention.

A trade secret owner who loses the trade secret to reverse engineering, but who has also built a brand through registered trademarks, may still enjoy a large competitive advantage over any new competitor who enters the market place with a product that uses the reverse engineered trade secret.

Trade Secrets, Copyrights, and Software

Source code and objective software code are copyrightable. The software owner should determine if the either type of code contains trade secrets. If so, the software owner may wish to register only the objective code portion of the computer program since the objective code is far less susceptible to trade secret discovery. Thus, software code may enjoy both copyright and trade secret protection. Certain types of software may also be eligible for patent protection.

An intellectual property attorney can advise you as to the possible ways available to protect your potentially valuable intellectual property, including the steps to take to establish a trade secret. Remember, the trade secret owner will have to establish that the information is a trade secret in order to have remedies available if the trade secret is stolen. If you are developing an information/process/product which could involve a trade secret and/or other types of intellectual property, we encourage you to call us at (305) 279-4740 or contact us online for a FREE consultation.