Trade secrets must be kept confidential

Glenn W. Peterson

A company in Sacramento, California may have information such as a formula, technique, program or device that needs to be protected from disclosure. Cornell University Law School’s Legal Information Institute states that this may be possible through a patent or a trade secret, but not both. The patent provides the company with the right to own exclusive rights for a limited amount of time, but the information is public. If the company opts for trade secret protection, the information is confidential unless there is public disclosure.

A person who makes that information public may be guilty of breaching confidentiality of a trade secret. However, it may be possible to prove that the company failed to make reasonable efforts to keep the information private. Forbes magazine notes that a person who discloses a company’s trade secret may not be found guilty in court if the company has not taken adequate steps to keep the information private.

Before earmarking the information as confidential, a company must clearly define which aspects must be safeguarded, and which information may be shared, if any. The specificity is part of making a reasonable effort to keep the secret. If it is not so well defined, and a company allows a portion of the information to be shared in a public forum, such as a trade show, or published online or in print in some format, a person may be able to prove in court that it was not truly confidential, in spite of a nondisclosure agreement.