Protecting valuable business information and resources: looking at some tools, strategies, P.2

On Behalf of | Apr 6, 2017 | Business Law

Last time, we began commenting on some of the tools and strategies businesses can use to protect sensitive information from competitors, specifically taking a brief look at intellectual property rights. As we noted, registering and enforcing trademarks, patents and copyrights, and establishing an effective strategy for licensing, can be an important way for businesses to protect and benefit from their intellectual property.

What, though, about valuable intellectual property that doesn’t fall within the above-mentioned categories? Many people don’t realize that trademarks, patents and copyrights are actually less commonly used for protecting a business’ intellectual property than trade secrecy. 

One of the reasons trade secrecy is less well-known than the aforementioned protections is that trade secrecy does not involve a government registration process. Each business decides on its own how it will protect its own trade secrets. Trade secrecy is extremely valuable to businesses, though, despite lack of formal registration.

Trade secrets are protected at both the state and, more recently, at the federal level. Federal trade secret protections allow national businesses to protect their trade secrets with a more uniform approach, though small businesses could potentially benefits from federal protections as well. In order to be considered a trade secret, business information must generally be used in the business, and must provide an economic advantage to the business that takes reasonable measures to keep it secret. Trade secret holders are protected from unauthorized disclosure and use of the protected information. Protections are not available when the information is not discovered by misappropriation, though.

State court protections for trade secrets vary, but federal courts are able to order a violating party to pay royalties to the business that owns a trade secret, or to order a party that misappropriates a trade secret to maintain its secrecy. In some cases, courts may order an award of damages, court costs and attorneys’ fees.

Trade secret protection can in some cases serve as an alternative to patent registration. Businesses should do their research and become aware of the issue, and work with an experienced attorney to determine how to best protect their valuable information, and to defend it from competitors. 

In our next post, we’ll continue looking at another tool companies can use to protect valuable business information from competitors: non-compete agreements.


World Intellectual Property Organization, Patents or Trade Secrets?,” Accessed April 6, 2017., Trade Secret Policy, Accessed April 6, 2017.


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