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What is Trade Secret Law?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 September 2017
  • Copyright Protected:
    2003-2017
    Conjecture Corporation
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Trade secret law involves the protection of intellectual property through exclusive access. Though not heavily regulated until the 19th century, questions of intellectual property rights, patents, copyrights, and trade secrets have been a part of legal discussion for many centuries. Modern trade secret law helps define what a trade secret is, and which circumstances define its legal use.

One of the most important documents in trade secret law is the Uniform Trade Secrets Act, or UTSA. This US Act provides a broad definition of what constitutes a trade secret, and is echoed in the trade secret protection laws of many other nations. According to the UTSA, a trade secret is a type of intellectual property with unique economic value that would be compromised if it became available to non-authorized personnel, and that is the target of an intentional effort by rightful owners to keep it secret. Essentially, the value of a piece of property defined as a “trade secret” is derived from the fact that it is unique; if another manufacturer copies the trade secret without proper authorization,this could diminish the inherent value of the original, protected property, thus violating trade secret law.

After defining the major term, trade secret law must then lay out the differences between authorized, permitted use, and unauthorized obtainment or use of a trade secret. In general, trade secret knowledge gained through theft, bribery, blackmail, or breach of a non-disclosure or confidentiality agreement is grounds for a lawsuit. In many cases, if the recipient of trade secret information knows that the information was obtained without authorization or through improper means, he or she is also legally liable.

Trade secret law can also involve the structure of potential legal consequences for a proven trade secret violation. In some cases, plaintiffs may be awarded damages to help restore lost profits and pay for legal costs. Some trade laws also permit the use of injunctions, which requires the cessation of any products or items that have been created through the use of illicit trade secret information. Injunctions help prevent future damages to the rightful secret owner, as well as stopping the violator from continuing to profit from his or her illicit actions.

Some trade secret law documents, such as the UTSA, also outline specific trial and court guidelines that try to reduce the spread of secretive information through the trial itself. This may include protective clauses that permit testimony and trial records to be sealed, even if this is not the ordinary procedure for a court system. If an item in question is determined to be a legitimate secret, the court cannot undertake actions that would contribute to the spread of its unauthorized use or knowledge.

Not all nations adhere to a trade secret policy that is distinguished from other types of intellectual property law. In the United Kingdom, for instance, trade secrets are categorized under a much broader legal heading of “confidential information." This legal structure creates a very different system for managing trade secrets, which often requires the existence of confidentiality agreements to determine if a breach has occurred.

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