What is a trade secret?

On Behalf of | Jan 4, 2021 | Business Law

Occasionally, a company in Pennsylvania will develop a product, recipe or invention that sets them apart from their competitors. If their competition can replicate this process, they’ll lose the advantage that attracts customers to their business. For this reason, the business might classify the invention as a “trade secret” so that it can receive protection under trade secrecy law.

What can be classified as a trade secret?

According to business law, a trade secret is a piece of information that gives your company an advantage. This information is unknown to people outside the company, especially competitors. A company’s trade secret could be a recipe, an invention, a marketing tactic, computer software or a manufacturing process. It could also be information about customers, prices, costs and overhead. Ultimately, there’s no specific definition of what could be considered a trade secret.

The one thing that all trade secrets have in common is that they must remain secret to receive protection. If copyright law protects your invention, other people can’t replicate it without potentially facing a lawsuit for copyright infringement. But if a trade secret gets out, anyone can use this information without getting in legal trouble. People can even attempt to reverse-engineer the trade secret themselves to figure out the formula.

For this reason, it’s important for you to keep your trade secrets as confidential as possible. If someone blurts out your secret, you won’t be able to take legal action against them. And once your competitors get ahold of your trade secret, they’ll be able to use this information as much as they want without facing legal punishment.

What’s the best way to protect your business?

If you’re just starting a new business, you should know that one slip-up can make you vulnerable to legal issues that you didn’t even know existed. Whether you’re running a small business or planning on launching a large company, any business can face legal challenges. If you don’t have an attorney on your side, your business might crumble before it gets the chance to take off and start making a profit.

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