Trade Secret

Trade secrets are the oldest form of invention or process protection. They are (in theory at least) the cheapest and easiest to implement too. All you have to do to have a trade secret is have some secret thing or process (the secret part) you use in commerce (the trade part) and keep a secret from others outside your control. Unlike copyright and patent law which are federal, trade secret law is state specific though there is a 1979 Uniform Trade Secrets Act which has been adopted in various modified forms by many states.

Trade secrets are probably nearly as old as civilization where people sought to gain advantage over others by having some knowledge that they could use to get a useful result that others could not. Metal-smithing and dye making were probably among the earliest where the knowledge was passed along within families or later guilds and apprenticeships.

Problems with Trade Secrets

The problem with trade secrets is that they must be kept secret. Other folks that independently come up with the "secret" can use it too, or blab it to the world, or even patent it, if it's patentable matter, and with their patent (in some cases) block you from using it until their patent expires! The exceptions where you can continue to use a "trade secret" that you had before someone else invented it and got a patent is when it's a business method or you have suitable documentation that shows you were using it in commerce for more than a year before they applied for their patent. The latter invalidates their patent but your "secret" isn't a secret anymore and anyone is free to use it.

The other problem with trade secrets is that they must be kept SECRET. This means more than keeping your mouth shut. It means that the secrets, if lucrative, must be very expensive or near impossible to reverse engineer so that no one successfully does it. The law generally allows anyone that wants to to reverse engineer any product you put on the market to see how it works then generally use or adapt what they learn (that is not protected by an enforceable patent) for their own purposes--even if it cuts into your profits.

And lastly, the other problem with trade secrets is that they must be kept S-E-C-R-E-T! This means more than keeping your mouth shut. It means actively, and generally successfully, making the effort to limit who knows the secret. That can include lifetime (and beyond) non-disclosure agreements with those who need to know, limiting the secret to only those who need to know, using locked doors, safes, and other means of securing the secret, and aggressively corralling any inadvertent leak or intentional breach. In the case of an intentional breach of security such as penetration of your security then theft, or "selling" or simply disclosing of the secret by an insider you actually do have legal recourse in the courts. Those who gained the secret through nefarious means or even through a party who got it via nefarious means can be ordered by the courts to keep it secret and never use it.

It should go without saying that you treat your invention and your inventor's notebook and all your work in progress as trade secrets shouldn't it? Keep the invention a trade secret at least till you have a PAP filed and, if you don't make it public through sales, perhaps even till a patent issues. If you do have to disclose your invention or parts of it to anyone you can continue to keep it a trade secret by only showing it to those who promise to keep it confidential. The best way is to get them to put the confidentiality, or non-disclosure agreement in writing as discussed in the Non-Disclosure (www.idearights.com/nondisc.asp) section of this material.