Should you Protect your “invention” by Patent or Trade Secret Laws?

November 27th, 2012

Trade secrets are parts of broad intellectual property, which also includes patents, copyrights, trademarks, and unfair competition.  These laws are quite independent from one another.  For example, generally, everything that qualifies for patent protection can qualify for trade secret protection as well.  However, it is impossible to have both trade secret and patent protection because the patent protection requires public disclosure of the invention after some point in time.  Therefore if you have a patentable invention, you must choose only one type of protection.  These are things to consider: Continue reading Should you Protect your “invention” by Patent or Trade Secret Laws? »

Employers v. Employees: Who Owns Trade Secret (California Law)?

November 25th, 2012

In California, pursuant to Cal. Labor Code § 2860, the employer owns trade secret created by an employee.  However, when an employee in California created a trade secret using an employee’s own time without the use of employer’s materials, a trade secret solely belongs to an employee – not an employer.  However, it is still encouraged to protect the company’s trade secret by separate written agreement.

Label your Information as a Secret

November 23rd, 2012

One of the easiest safeguards that a small company can take to protect its trade secrets is to simply inform its employees of its confidential information.  Make certain that all employees take care not to inadvertently disclose trade secrets.  Perhaps, the best way to maintain a trade secret is not to write it down at all.  That sensitive information can be transmitted orally to those who need to know.  Therefore, all confidential information placed in documents (hard copies, or electronic copies), records, or data should always be labeled “confidential.”  This is one of the cheapest and easiest ways to remind employees and others that such documents contain trade secrets and they should not be disclosed without proper authorization.  However, one must keep in mind not to mark everything confidential.  This will suggest to company’s employees that nothing is confidential if all documents are labeled confidential.  Also, a court may conclude that nothing is really confidential as well if everything needs to be protected whatsoever, regardless of importance. Continue reading Label your Information as a Secret »

What is “Clean Rooms” defense?

November 21st, 2012

To demonstrate that a company independently developed trade secrets (in order to claim trade secret, or to defense trade secret misappropriation), the company usually employs clean room techniques.  These techniques are:

  1. To isolate engineers or designers from other officers who are not related to confidential information
  2. To filter information to engineers or designers
  3. To carefully monitor and document the progress of these engineers or designers
  4. To review the progress done by these engineers or designers.

These “clean rooms” records and progress are documented and sometimes presented to the court in order to show that whatever the information created or found were independently created and developed.  These techniques are used to counter that the work was copied.


Unique Combinations of Public Information may Constitute Trade Secrets

November 19th, 2012

In Texas, a claim for misappropriation of a trade secret requires a plaintiff to demonstrate that: “(1) a trade secret existed; (2) the trade secret was acquired through a breach of a confidential relationship or discovered by improper means; and (3) use of the trade secret without authorization from the plaintiff.”    In order to be a trade secret, the Fifth Circuit consider: (1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involve in the business; (3) the extent of measures taken to protect the secrecy of the information; (4) the value of the information to the business and to its competitor; (5) the amount of effort or money expended in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.  With these elements, the Fifth Circuit held that “a trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation of which in unique combination, affords a competitive advantage and is a protectable secret.”  However, the court noted that “a simple and obvious change in an existing device or process is not a trade secret.”

This blog emphasizes the elements constituting a trade secret.  Keep in mind that the trade secret does not have to be made from the secret.  Instead, the information can be qualified as a trade secret even if the components of such information are widely known but the combination of such are not yet realized.  For example, it is likely that the Coca-Cola’s ingredients are known to the public (because those ingredients should be already discovered somewhere and there are a group of people who obviously knew it).  However, the unique combinations of those ingredients are not yet known and that is what kept Coca-Cola’s formula a trade secret.


Obtaining Trade Secret through State Public Records Requests

November 17th, 2012

Temporary restraining order (TRO) and preliminary injunction are two court orders that are typically issued to prevent obtaining the competitor’s trade secrets during litigation.  It is highly recommended that a plaintiff seeks a TRO and a preliminary injunction at the time the complaint is filed.  Therefore the plaintiff can prevent the trade secret from losing its secrecy by the first day that it is in the court’s hand.  In order to obtain those two forms of injunction, the plaintiff must demonstrate: Continue reading Obtaining Trade Secret through State Public Records Requests »

After Acquiring Trade Secrets, Customers can Refuse to do Business with Trade Secrets’ Holder

November 15th, 2012

The U.S. District Court for the Southern District of New York ruled in Turbon International, Inc. v. Hewlett-Packard Co. (S.D.N.Y. 2011) that there were no actionable trade secret misappropriation, unfair competition, and false advertising claims after customers refused to do business after acquiring relevant trade secrets. Continue reading After Acquiring Trade Secrets, Customers can Refuse to do Business with Trade Secrets’ Holder »

Criminal Trade Secret: it is sometimes a Crime

November 13th, 2012

Misappropriation of trade secrets is often characterized as a tort.  However, in some circumstances, the plaintiff may allege such action as a crime as well.  The differences are that: (1) the complaining party is the government, rather than the private company, and (2) the burden of proof is higher in a criminal case than a civil case.  That is, it is possible that a defendant is liable for trade secret misappropriation under tort laws but he is not guilty under criminal laws since the higher burden of proof for criminal liability is not met.  A defendant who misappropriated a trade secret can be charged, for example, with larceny, or receiving stolen property. Continue reading Criminal Trade Secret: it is sometimes a Crime »

Covenant not to Compete v. Trade Secrets: a Double Protection

November 11th, 2012

Trade secret protection can be used to prohibit former employees from revealing confidential information after they left their previous employment.  To double protect their trade secret information from being used or disclosed in the course of future employment, employers commonly take either or both of these two alternatives: (1) obtaining the employee’s agreement not to engage in post-employment competition with his or her former employer (commonly referred to as a covenant not to compete), and (2) using trade secret laws. Continue reading Covenant not to Compete v. Trade Secrets: a Double Protection »

The Trade Secret Revealed in Litigation

November 9th, 2012

Our team of trade secret attorneys strongly advises that if the statute of limitation does not soon run, a trade secret holder should not rush into suit.  It would be better to consult the experienced trade secret attorneys first.  In some cases, you might lose all the trade secret protection, if the protective order is not properly issued.  We can help you making sure that your trade secret protection is still effective. Continue reading The Trade Secret Revealed in Litigation »

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Events & Conferences:
  • International Trademark Association 2011, San Francisco, California
  • Cyber Law Summit 2011, Las Vegas, Nevada
  • Game Developers Conference 2011, San Francisco, California
  • DOMAINfest 2011, Santa Monica, California
Recent Attorney Speaking Engagements:
  • South By Southwest 2010 SXSW Interactive Conference, Austin, Texas
  • West LegalEdcenter Midwestern Law Firm Management, Chicago, Illinois
  • Internet Advertising under Part 255, Altitude Design Summit, Salt Lake City, Utah
  • Online Defamation and Reputation Management, News Talk 650 AM, The Cory Kolt Show, Canada Public Radio Saskatewan Canada
  • Alternative Fee Structures, Center for Competitive Management, Jersey City, New Jersey
  • FTC Part 255 Advertising Requirements, Mom 2.0 Conference, Houston, Texas
  • Webmaster Radio, Cybersquatting & Domain Monetization, Fort Lauderdale, Florida
Notable Complex Litigation Cases Handled By Our Lawyers:
  • Trademark Infringement, Milwaukee, Wisconsin
  • Cybersquatting Law, Trademark Law and Dilution Detroit, Michigan
  • Internet Defamation & Online Libel Indianapolis, Indiana
  • Trade Secret Theft, Chicago, Illinois
  • Cybersquatting Law, Anticybersquatting Consumer Protection Act Miami, Florida
  • Cybersquatting Law, Anticybersquatting Consumer Protection Act Eastern Dist. of Virginia, Alexandria
  • Stolen Domain Name, Orlando, Florida
  • Commercial Litigation, Tampa, Florida
  • Copyright Infringement and Cybersquatting Law, Grand Rapids, Michigan
  • Mass Tort Litigation, Los Angeles, California
  • Stolen Domain Name, Detroit, Michigan
  • Adwords Keyword Trademark Infringement, Los Angeles, California
  • Trademark Infringement & Unfair Competition, Boston, Massachusetts
  • Non-Compete Agreement and Trade Secret Theft, Detroit, Michigan
  • Mass Tort, Philadelphia, Pennsylvania
  • Mass Tort, Tyler, Texas
  • Insurance Indemnity, New York
  • Copyright Infringement, Detroit, Michigan