d.l.hall,attorney,pllc
14555 North Scottsdale Road
Suite 160
Scottsdale, Arizona 85254
fort bowie
Call (480.596.4045) or email Dennis
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d.l.hall,attorney,pllc 14555 North Scottsdale Road fort bowie Call (480.596.4045) or email Dennis |
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What is a Trade Secret?
A trade secret can be a formula, pattern, compilation, program device, method, technique, or process. To be a trade secret, it must satisfy two tests: (i) derives independent economic value, actual or potential, from no being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Protecting Trade Secrets
Preventive measures must be taken to prevent former and current employee disclosing trade secrets. These include: providing confidentiality agreements as a condition of new or continued employment; reminding employees, independent contractors, and temporary personnel what information is considered to be confidential and why it must be protected; identify confidential information adn placing it in separate files, stamping it "Confidential and Proprietary;" limiting access to confidential information, making it accessible only to people who absolutely must see it; and placing the information in a separate locked file cabinet or require select personnel to use a password to gain access to it.
Trade Secrets Law
Trade secret protection is available for all types of ideas and information, so long as they are secret and provide a competitive advantage. In contrast, patent protection only lasts for a set period of time (in the U.S., generally 20 years after the date of filing an application) while trade secret protection may last indefinitely. Trade Secret and patent law differs in that a patent holder may exclude anyone, even someone who independently develops the same idea, from practicing the invention or using the design disclosed in their patent. The owner of a trade secret has no protection against persons who independently develop the same idea or invention, but is protected against someone who misappropriates their trade secret.
Non-Compete Agreeements
Are non-compete agreements enforceable? That is a question of state law, and the answer varies, but the dominant view questions the right of a former employer to restrict a former employee's future employment. Pure non-competition agreements against employees are highly disfavored. A covenant not to compete in an employment agreement is only “valid and enforceable by injunction when the restraint does not exceed that reasonably necessary to protect the employer's business, is not unreasonably restrictive of the rights of the employee, does not contravene public policy, and is reasonable as to time and space.”
Theft of Trade Secrets
Besides being protected under civil law, theft of trade secrets has been criminalized. Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly steals . . . or without authorization copies, duplicates, sketches, draws, photographs, downloads . . . . or conveys such information; receives, buys, or possesses such information, knowing the same to have been stolen or appropriated . . . shall . . . be fined . . . or imprisoned not more than 10 years, or both.
Call (480.596.4045) or email Dennis.
Arizona Limited Liability Companies
This Web site has been prepared by d.l.hall,attorney,pllc for informational purposes only and is not legal advice.Readers should not act upon this information without seeking professional legal advice.
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