Examples of Trade Secret Lawsuits in Maryland

Trade secrets are an odd form of intellectual property.  Unlike patents or copyrights, which have legal regimes and statutes to protect them from infringement, a trade secret might be protected solely by how well you, your employees, and your company as a whole can keep the secret.  There are state and federal statutes that give you the right to sue for theft of trade secrets and infringement, but it isn’t always clear what cases qualify as appropriate for trade secret litigation, and which ones should be handled as copyright or trademark infringement cases.  Maryland trade secrets attorney William S. Heyman of The Heyman Law Firm explains some examples of cases that would be handled as trade secrets lawsuits.

What is the Legal Definition of a Trade Secret?

Trade secrets are one of the major types of intellectual property.  Intellectual property (IP) is intangible property that you may not be able to touch, but you still have the right to possess and exclude others from using.  Copyrights, trademarks, and patents are all common types of IP that businesses use to build their brand, protect their designs, and help consumers understand they are receiving genuine products.

While you can copyright processes, formulas, and techniques, doing so may require exposing your secret to the world.  When you file for a patent, you need to tell the patent office how your process or formula works and prove that it is unique and worthy of patent protection.  If you fail to get a patent, your secret may now be exposed.  Alternatively, once the patent is granted, your designs or processes are now out there in the world, and others may be able to reverse-engineer similar products that do not infringe on your patent.  Once the patent expires, you may have no protections left.

Because of this, some companies may prefer to keep their processes, techniques, recipes, or formulas secret.  This ensures that others will not copy their techniques or products because they simply do not know how to do it.  This does not prevent others from reverse-engineering the secret, but it is illegal to steal the secret or commit industrial espionage to learn a trade secret.  Talk to a business advisory lawyer to understand the most effective way to secure your intellectual property.

For information to qualify as a trade secret, it must be something that is kept as a secret, has value because it is secret, and is kept secret by reasonable efforts.  Without taking steps to protect your trade secret, it may not qualify as such, and you may not be able to file a trade secret claim.  A commercial litigation lawyer can help you understand if your case qualifies under Maryland law or federal law.

Trade Secret Examples

Many trade secrets are involved in products and processes that we encounter on a daily basis:

Secret Recipes

Some of the largest food companies in the US, like KFC and Coca-Cola, produce unique products by sticking to their “secret recipes.”  While other companies may make fried chicken and cola, those companies do not know the trade secrets behind these recipes and are not able to duplicate the flavors or processes exactly.  This gives companies market advantages since other companies cannot reproduce the same tastes.  It also means that these companies cannot claim patent or trademark infringement if someone were to duplicate the recipe exactly.  Instead, their ability to keep it secret protects their recipe.  Multinational and small businesses alike may have secret recipes, and trade secrets cases could arise if an employee or another insider improperly leaks or sells information on a secret recipe.

Formulas

While many drugs and medications need to be approved by the Food and Drug Administration and are protected by patents, other chemical formulas might be protected as trade secrets.  For example, the exact formulation of WD-40, a common household lubricant and waterproofing spray, is protected as a trade secret.  The company literally keeps its formula in a bank vault..  If your company produces any chemical formula, such as glue or paint, you may prefer to keep your formula a trade secret rather than filing for a patent and exposing the ingredients and components of your formula.  If someone were to leak the information or hack into your computers to retrieve formula information, you could sue for theft of trade secrets.

Software

Software is often patented because it is difficult to distribute software to users without them having a copy of the code.  Software is often hacked or cracked, and the information is used to make knock-offs or improve competing software.  However, some software functions behind the scenes, and the public never gets access to its code or processes.  Google’s search algorithm, along with other AI and cutting-edge algorithms are often kept under tight security to prevent duplication.  Infringing on this secrecy or distributing the software could infringe on the owner’s trade secrets.

Techniques

Many companies use secret manufacturing techniques or processes to ensure that their specific quality or attributes come through in the final product.  While factories may be much harder to protect from prying eyes, many manufacturers take care to use non-disclosure agreements and prevent things like cell phones from entering the factory to ensure their trade secrets are kept.  If someone violates these rules, they could be held responsible for the leak.

Baltimore Trade Secrets Lawyer

If your company has been the victim of a trade secrets violation or has had its secret processes, techniques, or formulas leaked, talk to an attorney right away.  Many legal options exist to help you get compensation for the loss and stop further leaks by filing injunctions and restraining orders.  For a consultation on your case, contact Maryland business law attorney William S. Heyman today at (410) 305-9287.