Trade Secrets Act

Trade secret protection is probably the weakest of all intellectual property rights. The US Uniform Trade Secret Act defines a trade secret as information, including a formula, pattern, compilation, program device, method, technique, or process, that (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy [33]. 

Uniform Trade Secrets Act. Available at http //nsi.org/Library/Espionage/ usta.htm... 

Some of the states are adopting a Uniform Deceptive Trade Practices Act and a Uniform Trade Secrets Act. As more states adopt a Uniform Trade Secret Act, the laws in the various states tend to become more uniform and predictable. There is a trend towards a more uniform policy and punishment of individuals and organizations that participate in the outright theft of trade secrets. Hopefully this trend will continue. 

Trade secret protection is generally governed by state law thus, its definition can vary from state to state. One common definition provides that a trade secret consists "of any formula, pattern, device, or compilation of information that is used in one s business, and that gives him an opportunity to obtain an advantage over competitors who do not know or use it" (268). Another definition, which a significant number of states (269) have adopted in some version, is provided by the Uniform Trade Secrets Act [Ilnformation, including a for-... 

As of 2001, about 43 states and the District of Columbia had adopted the Uniform Trade Secrets Act or some version thereof. See R M. Milgrim, Milgrim on Trade Secrets 305[1] (2001). 

Section 14 - outlines the responsibility of the Agency to protect trade secret and confidential business information it gathers in the process of implementing the Act. 

To speculate on what the law will be in the near future is risky at best and in trade secret law, perhaps more so. Certain trends seem to be present. There is a bill in Congress on a Federal Unfair Competition Act, presently S.31 in the 95th Congress, which will probably be before Congress for some time in substance under different numbers for each Congress. 

If a new patent act changes the patent statutes, its impact on trade secrets should be considered as to length of protection, costs, and effectiveness of protection. 

Patentability can also be jeopardized during the application process by failure to disclose critical items in connection with the invention. One is the best mode of the invention, which is the favored embodiment or means of implementing the invention, particularly the one example that functions the best or enables the invention to perform to its utmost advantage, as known to the inventor at the date of applying for the patent. The best mode must be included in the text of the patent application, and cannot be reserved as a trade secret. A second disclosure requirement is the disclosure of relevant prior art that the inventor is or becomes aware of. This is a continuing requirement that lasts until the issuance of the patent, and encompasses any publications, disclosures, uses, sales or offers, and other acts or documents that qualify as prior art. 

Satisfying the requirements of such statutes as the Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act and the Food, Drug and Cosmetics Act can consume a substantial portion of the seventeen-year patent term. While a company may try to keep new products as trade secrets until they are ready to be marketed, the failure promptly to file patent applications may allow competitors to obtain patents over similar inventions. The company would thereafter have to challenge such patents in court in order to market its own products. 

Maintaining new product information as trade secrets can pose commercial risks when others may seek patents if they develop similar products. Exactly the extent of this risk is uncertain. Section 102(g) of the Patent Act, 35 U.S.C. 102(g), provides that a person may obtain a patent over an invention, even if he was not in fact the first to invent, if the first inventor has concealed or suppressed the invention or otherwise not acted diligently. Thus, a second inventor may be able to obtain patent protection over an invention when the first inventor has relied on the trade secret doctrine for his protection. The reported cases to date have not addressed the question as to whether the second inventor, having obtained a patent, can thereafter sue the first inventor for infringement. 

The United States Environmental Protection Agency (EPA) has promulgated regulations under the Toxic Substances Control Act (TSCA) to protect from disclosure to third-parties confidential business information (CBI) submitted to the Agency. The statutory provision requiring EPA to create protections for CBI is TSCA 14. TSCA 14 defines the nature of the CBI that should be maintained in confidence by reference to the Freedom of Information Act, which in turn protects information from disclosure if it consists of trade secrets and commercial or financial information obtained from a person and privileged or confidential. Examples of information considered CBI under TSCA include chemical formulas, material inputs identification, process information, chemical substance identities, company names, site locations, and volumes of substances manufactured, imported, or processed. The EPA may make pubHc any information claimed as CBI in health and safety studies on substances or mixtures that have been offered for commercial sale or for which testing is required under 4 or for which notification is required under 5. However, EPA cannot disclose process information or information about the proportion of chemical substances in a mixture. ... 

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