As illustrated by the recent lawsuit by America’s Test Kitchen against celebrity chef Christopher Kimball, companies in a variety of industries are vulnerable to losing their trade secrets.
Although it is a common misconception that trade secret issues usually apply to high-tech companies, every type of business has potential trade secrets. While state laws as to what constitutes a trade secret vary, confidential information, processes, techniques, methods, programs, formulas, patterns, and the like — data that gives a company an edge over its competitors — can potentially constitute a trade secret. In addition to the protections offered by state laws, the recently passed federal Defend Trade Secrets Act also provides new mechanisms to protect against trade secret theft.
To qualify for protection as a trade secret, however, the information at issue must genuinely be a secret — it cannot be known by the competition and cannot be publicly known or available. Additionally, a trade secret must involve a unique process or methodology. Examples of protected information can range from secret recipes to the way a home goods chain organizes its wares or the color schemes used in display windows.
Employers seeking to avoid potential loss of trade secrets should bear in mind the following:
Finally, make sure your employee contracts and similar documents outlining employees’ confidentiality obligations are up to date an enforceable.