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Trade Secrets

A formula, process, or information that is secret, and gives its owner a business advantage may be protected under State laws concerning trade secrets.  Trade secrets, basically, are any formula, device, or information that is used in a business, and is of such a nature that it gives the owner an advantage over competitors who do not have the information.  Customer lists may be protected unless they can be easily developed from public information.  Trade secrets are protected under State law rather than Federal law.  This protection may be by virtue of common law or statutory law, such as the Uniform Trade Secrets Act.

When a trade secret is made public, it loses its protection as a trade secret unless it is disclosed in a restrictive manner to persons who know of its confidential nature.

Generally, computer programs may be copyrighted.  The Computer Software Copyright Act protects copyrighted programs from infringement.  In some cases, computer programs may be patented.  However, since patents are public record, there is a danger that the program might be copied by someone.  Trade secrets laws are sometimes used to protect computer programs.

Sometimes creators of software will require users to sign a licensing agreement which provides greater protection than the copyright laws.  Sample restrictions include limited reverse engineering, which is a method of learning the structure of a program and limiting the renting of the program of third parties in order to prevent unauthorized copying.

Inside Trade Secrets