Keep Your Trade Secret for Your Invention Idea Confidential
As an inventor, if you decide NOT to patent an invention idea then you can take steps in order to keep your idea secret. One of these steps is through the use of trade secret protection.
When Should you Consider Trade Secret Protection?
- You don’t want to invest in a patent for your invention idea.
- You have a unique competitive advantage over your competition in terms of a design, manufacturing, production capability and/or business process.
- You have filed for a patent but are still waiting for your patent to be granted.
- You know that you can take precautions to keep your invention idea a secret. This also includes disclosing your trade secret only to those that agree that they will keep this information secret.
If you are still confused as to whether you need to be concerned with trade secret protection ask yourself, “If my competition were to get ahold of this information would my business be financially impacted?” If your answer is, “yes” then you should be thinking about implementing trade secret protection(s).
Can I Register a Trade Secret?
No, you cannot ‘register’ a trade secret. Why? Because there is an understanding that once the trade secret is ‘registered’ that it would no longer be ‘secret’.
Functional Versus Non Functional Trade Secrets
Suppose you have created a great new life raft for ocean going ships to use in case of emergencies. In addition, one of the great features about your life raft is a new highly reflective florescent orange coloring that you created for use in its construction. Since your new reflective orange coloring is 1000 times brighter than anything on the market today it makes your life raft a highly visible object out on the ocean which is very desirable feature to have in emergencies. In this case, the formula for the highly reflective florescent orange coloring could be considered a functional trade secret.
As for a nonfunctional trade secret, imagine that you have come up with a really great name and logo for your new invention idea. However, you haven’t filed for a trademark yet on your product name and logo. In this case, keeping your new logo and invention idea name a secret is key. Although, once you acquire your trademark or use your new logo and invention idea name in public, you will no longer fall under trade secret protection but, instead, will fall under trademark protection.
Precautions against Disclosing a Trade Secret
Inventors that fail to implement protections to keep their trade secret from being disclosed have very little legal recourse, if any when it comes to trade secret law. Therefore, the more valuable your trade secret (i.e., the greater the financial impact should your trade secret be revealed) the greater the protections that you need to implement. What kind of precautions should you implement? Well, that depends. If your trade secret isn’t all that valuable then placing your trade secret in a folder marked, ‘confidential’ and locking it in a filing cabinet may be sufficient. On the other hand, if you are the CEO of Coca Cola, you’d probably implement multiple layers of protection in order to keep your secret formula protected.
Another way to protect your trade secret from disclosure is to implement a form of legal compulsion. This means that before you reveal your trade secret to anyone else that this individual would sign some sort of non-disclosure agreement. Should the individual later reveal your trade secret then you have a means of legally seeking damages from this individual. As a side note, individuals that have a fiduciary (legally binding) duty such as lawyers to keep your idea secret if it was revealed to them will NOT be required to sign a non-disclosure agreement.
What if I Decide to Disclose my Trade Secret to the Public?
If you decide to disclose your trade secret about an invention idea to the public, your trade secret protection will typically be terminated at that point. In addition, you will not be able to seek any monetary damages once you have disclosed your trade secret. Therefore, you should heavily consider the costs of filing a patent on your invention idea versus any potential financial loses that you may incur once you decide to disclose your trade secret.
What Do I Do if my Trade Secret was Violated?
Sometimes, your trade secret may be misappropriated through illegal means (theft, bribery, industrial espionage, etc.) or by individuals that promised not to disclose your trade secret but did so anyway despite a written agreement. If you can show that:
- You took precautions to protect your trade secret AND
- Your trade secret was acquired through improper means
Then you may be able to seek legal recourse to prevent people from using your trade secret for financial gain
When you CANNOT seek legal recourse for a trade secret violation
- If another company manages to reverse engineer your trade secret. Suppose another company legally purchases your life raft with the super bright orange florescent coating. This company then takes your raft apart and chemically analyzes the make up of your orange coating. After several months, the company finally manages to reverse engineer the formula that you are using. In this case, your competitor will be free to legally manufacture a similar super bright orange florescent coating for their products.
- Another inventor just happens to independently invent your trade secret. Suppose that Jim was experimenting with creating a super bright orange florescent pen to highlight text in a textbook. Jim, completely independently from you, legally managed to create the exact same super bright orange florescent coating that you are using for your life raft. In this case, you would not be able to seek legal recourse against Jim for the violation of your trade secret.
- It’s proven that you disclosed your trade secret to someone without following the proper steps to keep your trade secret confidential. Suppose that you told Jane about your trade secret without having Jane sign a non-disclosure agreement. Jane then told a friend who posted the trade secret to a social media site. In this case, your trade secret has gone public and you will NOT have any legal recourse against Jane because you failed to keep your trade secret confidential.
How long does trade secret protection last?
Forever, so long as you manage to keep the information about the trade secret confidential. Note: Both the secret formula for Coca Cola and the Kentucky Fried Chicken secret recipe have been kept for a very long time.
You filed a Patent, Will your Trade Secret Protection be Lost?
No, not initially. You still have the right to trade secrecy protection up to 18 months from the date your patent was filed. If, after this time, your patent is granted and published, then you will lose your trade secret protection. On the other hand, if your patent was both rejected by the United States Patent and Trademark Office (USPTO) AND it was not published, then trade secret protection will still apply
As you can see, protecting your invention idea through trade secret law is a valid option. Remember, the key to trade secret protection is keeping your invention idea secret. Therefore, (1) limit the number of people that know about your invention idea, (2) get those non-disclosure agreements signed, and (3) implement physical means of control to protect your ideas.
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