How are trade secrets protected?

A: Protecting trade secrets is a critical part of your business operation. To understand the importance of this, you must understand the definition of a trade secret.

A trade secret must contain information that has specific economic value to the owner of the business. The value must be great enough that if the trade secret were to become public, it would cause the owner to suffer. For example, the recipe for KFC's famous chicken as well as the recipe for Coca-Cola, are well-protected trade secrets. Systems and business methodologies can also qualify as trade secrets that set one business apart from a competitor.

The business that holds the trade secret is responsible for making every effort it can to keep it confidential. Employees can be required to sign agreements that protect trade secrets. These are known as non-disclosure and non-compete contracts. If they are violated, an employee can end up paying heavy penalties, along with damages to your company.

The federally regulated Uniform Trade Secrets Act and Economic Espionage Act of 1996 also provides protection of trade secrets and imposes heavy fines upon evidence of violation. In addition, violators may also serve prison time, even up to 15 years. Fines can be as high as $500,000. New York and New Jersey have not adapted this act. If your business holdings are in other states, your trade secrets may be protected by these regulations.

If you believe your trade secrets have been used illegally, you should contact a business and franchise lawyer who has experience with trade secrets and the laws surrounding them. A business and franchise lawyer can help protect your rights as a business owner.

Offering expert help in New York, New Jersey and nationwide, business and franchise lawyer Charles N. Internicola is ready to answer your questions about franchise, trade secrets, national and international trademarks, and any critical business matters that may arise. Contact us today - 1-800-976-4904  

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