Articles Tagged with trade secrets

AdobeStock_427349372-300x147Here in San Jose, intellectual property (IP) is the most valuable asset many companies own. Individuals, too, have IP rights that must be protected. The San Jose intellectual property attorneys at Structure Law Group, LLP help businesses and individuals protect their intellectual property. The United States Patent and Trademark Office (USPTO) recognizes different tools that can be used to protect different types of IP. Keep reading to learn more about the four  distinct types of intellectual property that are recognized by law.

Patents

According to the USPTO, patents are an IP tool used to protect technical inventions. These technical inventions can be chemical compositions, mechanical processes, or machine designs. When a technical invention is protected with a patent, the patent holder may prevent others from using the invention in any way without their permission.

AdobeStock_269304451-300x200As your Silicon Valley startup grows, it’s hard to know whom to trust. You’ve likely gone from a close-knit group of founders invested in the confidentiality of your trade secrets to hiring at-will employees who are less concerned with secrecy. Both federal and state laws reflect the value placed on corporate trade secrets and confidential information. Especially in technology-driven industries where startups are valued for their unique innovations, protecting your trade secrets is a key to success.

Defining Trade Secrets & Confidential Information

While you can contractually bind your employees to keep certain confidences, only qualifying trade secrets are protected by state and federal law. Trade secrets are defined as information that derives economic value by not being generally known or readily ascertainable by competitors and are subject to reasonable efforts to maintain confidence. Trade secrets can consist of:

Trade-Secrets-300x169The federal Defend Trade Secrets Act (“DTSA”), which is mirrored by the Uniform Trade Secrets Act (“UTSA”) adopted by most states, provides employers with legal recourse after the misappropriation of their trade secrets. Whether employer trade secrets, defined as information that derives economic value by not being generally known, are illegally accessed by hackers or stolen by employees, there is no legal recourse for the theft under the DTSA if the trade secrets weren’t adequately protected. It is a necessary element of a claim for damages under the DTSA and related state legislation that an employer took reasonable precautions to protect its trade secrets. What constitutes “reasonable precautions,” however, is dependent on the facts and circumstances of each case.

Protecting Confidential Information & Trade Secrets from Employees

Not all confidential information qualifies as a trade secret. Accordingly, business practitioners recommend protecting confidential employer information from employee misuse through stringent employment contracts and confidentiality agreements. Its recommended employers insert the following clauses into their employment agreements:

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Palo Alto business owners are faced with heavy competition in the Silicon Valley, all of which are looking for the best practices, methods, and trade secrets. Some of a company’s most valuable assets can be found in your intellectual property. Each year intellectual property theft costs businesses billions of dollars. If you think your intellectual property might be at risk of being stolen or you can confirm it has been stolen, you need to act fast.

Different Types of Intellectual Property

In order to protect yourself from Intellectual Property theft, a business owner must first define what they need to protect. For example, if the business owners want to secure a method of a certain process, a formula specific to their company, or even lock down a logo and name to fight off competition, there will be different applicable forms of legal protection to consider and utilize. There are several forms of protection, some of them being:

Non-Compete-1-300x200In the innovative and competitive culture of the California job market, intellectual property rights are valuable and fiercely guarded. Many employers favor agreements which prohibit their employees from disclosing trade secrets or working for their competitors. Unfortunately, many of these agreements are wholly unenforceable by a California court of law. With the legal advice of an experienced California intellectual property attorney, business owners can access the appropriate tools to protect their legal interests.

The Trouble With Non-Compete Agreements

As a general rule, California law does not allow for enforcement of non compete agreements (NCAs) against an employee after he or she leaves the company. This position espouses a larger public policy which favors an employee’s right to choose to change employers. Many employers believe they can get around the rule prohibiting NCAs with careful wording or crafty legal argument. California courts have almost always seen through these creative tactics, and uniformly refused to enforce them against employees. The Huffington Post reports on just some of the many arguments which have not persuaded California courts:

Businesses must endeavor to guard their trade secrets jealously. Failure to do so can wreak havoc upon development and growth. It will also give competitors a leg-up in the marketplace. Knowing and understanding California’s trade secret law is therefore critically important. Implementing multiple safeguards to prevent trade secret disclosure is necessary. If a business fails to implement reasonable safeguards to prevent trade secret misappropriation, then the business may be without recourse in court. Working closely with experienced business attorneys to develop the appropriate security measures to prevent trade secret theft could prevent disaster from striking. The San Jose San Jose business attorneys at Structure Law Group, LLP (in San Jose and Oakland) have extensive experience counseling businesses on how to best protect their trade secrets and defending businesses against trade secret misappropriation in court.

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California’s Uniform Trade Secrets Act (“UTSA”), which follows the Uniform Trade Secrets Act adopted in 48 states, defines a “trade secret” as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Ca. Civil Code §3426.1.)

In order to assert a claim for misappropriation of trade secret information, the owner of the trade secret information must identify its trade secret with sufficient specificity so that the information is separate from areas of general knowledge. For example, customer lists, marketing plans or pricing concessions are examples of broad categories of trade secret information. Or, the trade secret can be highly specific, such as a newly designed manufacturing process or the recipe for some sugary carbonated beverage, such as the recipe for Coca-Cola.

Many business owners rely on ideas, formulas, inventions, and other types of intellectual property (IP) in order to make a profit. In fact, IP can be one of the most valuable assets of a company. Your specific product, brand, and other identifiers are often the components that define you and set your business apart from others. Therefore, protecting your IP is extremely important to the success of your venture. In order to prevent others from misappropriating your valued intellectual property, you always want to obtain formal legal protections.

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There are many options for protecting your IP, and choosing the right one may be confusing for business owners who are not familiar with the relevant laws. Many business owners receive denials for their applications for patents, trademarks, and copyrights and do not know what their options are from there. Fortunately, an experienced business attorney can help you achieve trade secret status for your IP, which may actually be more beneficial than other protections in several ways. Continue reading ›