1. SSHHHH! It’s a Trade Secret
Steve Baron
April 3, 2003

2. What Is A Trade Secret?

3. Information Economic value Not generally known
Reasonable efforts to maintain secrecy

4. Types of Trade Secret Information
Technical or non-technical data
Formula
Pattern
Compilation
Program
Device
Method
Technique
Drawing
Process
Financial data
List of actual or potential customers

5. Economic Value
Actual
Potential

6. Availability of Information
Not generally known by competitors

7. “Reasonable” Efforts to Maintain Secrecy
Absolute secrecy not required
Reasonable under the circumstances
Comprehensive program

8. Examples of Methods to Maintain Secrecy
Lock & Key
Passwords
Restricted access
Sign-in sheets
Confidential stamps
Non-Disclosure Agreements

9. The sum may be a trade secret, even if each part is not.

10. Famous Trade Secrets Formula for Coca-Cola
Recipe for Kentucky Fried Chicken
Formula for Smith’s Cough Drops

11. Advantages of a Trade Secret
No time limit
No public disclosure
No governmental filing process

12. What Law Governs Historically – Common Law Uniform Trade Secrets Act
Illinois Trade Secrets Act
Economic Espionage Act

13. Historically – Common Law – Six Factor Test
Extent known outside company
Extent known by employees
Measures taken to guard secrecy
Value to company and competitors
Time, effort and money to develop
Difficulty of proper acquisition

14. Uniform Trade Secrets Act
Adopted by nearly 40 states

15. Illinois Trade Secrets Act
Effective since 1988
Adjunct to common law
Gives “teeth” to infringement claims

16. Illinois Trade Secrets Act
Remedies
Injunction
Compensatory damages
Punitive damages
Attorney’s fees

17. Economic Espionage Act
Gives U.S. Attorney sweeping powers to prosecute any person or company involved in trade secret misappropriation
Punishes intentional stealing, copying or receiving of trade secrets
For product produced or placed in interstate commerce

18. Economic Espionage Act
Penalities
Individual fines up to $500,000
Company fines up to $5 million
Prison – up to 10 years for individuals and 15 years if theft performed for foreign government

19. Proper Methods to Obtain Trade Secrets
Legitimate Observation
Reverse Engineering
Independent Invention