While companies are starting to better appreciate the role trade secrets can play in underpinning their intellectual capital, proactive trade secret management is still a very much neglected activity. This neglect can ultimately lead to the loss of valuable trade secrets and the loss of millions of dollars of value and legal fees. The widespread failure of many companies to take reasonable steps to protect their information should give managers and their company directors much pause. Fortunately, the law is starting to provide a clearer picture of what needs to be done, and there are many providers well versed in both best practices and productivity tools that will enhance a company’s trade secret protections. Read more
In part 1, I reviewed patents and copyrights. In this post, I will discuss trade secrets, IP rights, and other protection measures.
No federal or state statute expressly addresses initial ownership of a trade secret as between a company and the employee or independent contractor who develops the trade secret. All US states, but New York, have enacted a version of the Uniform Trade Secrets Act (UTSA), which includes a trade secret definition substantially consistent with the definition under the federal trade secret protection statute, the Defend Trade Secrets Act of 2016. Under both federal and state law, trade secret protection is only available for business, financial, or technical information if: Read more
The outsourced manufacturing agreement should require procedures that limit access to the company’s confidential information to specific, identified manufacturer personnel and solely to the extent they need to know the information for performing the services.
If possible, the company should require the manufacturer to amend its employment contracts with individuals having access to the company’s confidential information to provide for confidentiality and non-compete obligations concerning this information. The outsourced manufacturing agreement should make the manufacturer directly liable to the company for any breach of these obligations. Read more