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Trade Secrets

Trade secrets are formulas, designs, practices, processes, or patterns, sometimes called know-how, that are not widely known or cannot be reasonably ascertained. Trade secrets usually consist of information that confers some type of monetary benefit on the holder of the trade secret. Efforts are made to keep trade secrets private. Some examples of trade secrets are the formula of Coca-Cola and designs for manufacturing radio parts.

Trade secrets can usually be protected without registration or other formalities. However, in order to be protected, the information must be secret, it must have commercial value, and the holder of the information must have taken steps to keep it private. There are some steps you can take to protect your trade secret. If your business has a trade secret, you should consider whether the secret can actually be patented. If it can be, you should consult with an attorney on whether it could be better protected by a patent.

You should make sure that only a few people know about the secret and that they know it’s confidential. Use confidentiality agreements with both your employees and your business partners. In general, trade secrets are protected under state laws rather than federal laws. Most states have enacted the Uniform Trade Secrets Act, which protects trade secrets that have not been disclosed.

There are a few ways companies will try to discover the trade secrets of their competitors. They may use reverse engineering, which is to discover how something operates by analyzing its structure and functions. Reverse engineering, which generally entails taking something apart so its inner workings can be analyzed, is legal.

Another way businesses try to discover trade secrets is through industrial espionage. Industrial espionage can include breaking into a company’s operations, hacking into computers of a competitor, setting up wiretaps or planting hidden bugs, or other illegal means of obtaining a competitor’s secrets. The Economic Espionage Act makes it illegal to steal trade secrets to benefit foreign countries. The Economic Espionage Act also makes it illegal to steal trade secrets for commercial or economic purposes.

If a trade secret is stolen, the thief may be held liable for the taking. The company whose trade secrets were stolen could obtain an injunction ordering the thief to stop using the trade secret. The company could also get an award of damages for all profits the thief made by using the trade secret.

If your business uses trade secrets, you should contact our knowledgeable attorneys who can help you protect that trade secret. In some instances, the trade secret should be patented. You should make good use of confidentiality agreements, as well as ensuring your security procedures are adequate.

Please feel free to contact Phil today to discuss your legal needs at 973-206-8200.


Based in Morristown, NJ Berman Rosenbach, P.C. serves the surrounding areas including but not limited to; Morris County, Somerset County, Hunterdon County, Essex County, Union County and all Federal Districts Courts.

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