When we think of intellectual property, we often think of copyrights, trademarks, or patents. However, for a business owner there may be trade secrets that you want to protect as well.
A trade secret is any information that gains economic value because it isn’t generally known and can’t be easily discovered through lawful means. This could be a formula, recipe, pattern, program, method, or process. While some forms of intellectual property have a limit to how long they are protected, trade secrets can potentially last indefinitely. To qualify for trade secret protection, a company must take action to protect and maintain the secrecy of the trade secret. Loss of a trade secret can significantly damage a company's ability to compete in their market. As such, the law protects those who have been damaged by the illegal sharing of trade secrets.
Utah, as well as most other states, has adopted the Uniform Trade Secrets Act (UTSA). This act imposes civil liability, or makes someone legally responsible, for improperly sharing or acquiring trade secrets.
Utah courts have found that what can be protected as a trade secret depends on the context. For example, they have held that customer lists can be a trade secret if the customers are not known in the industry and are discoverable only through extraordinary effort. However, at other times, they have held that customer lists where the names of the customers are publicly available are not protected by trade secret laws.
The UTSA does not protect trade secrets if the competition creates the same product independently through licensing, reverse engineering, or any other proper way of obtaining it. Some ways trade secrets are improperly obtaining are:
In order to mitigate these risks, companies can create nondisclosed agreements for anyone, including employees, who come in contact with the trade secret. This shows judges that action was taken to protect the trade secret and gives your company a greater chance of winning your case if your trade secret is shared.