When a business owner or executive asks what kind of law I practice, and I tell them about my trade-secrets work, I often get a response along the lines of “Interesting stuff, but we don’t have any trade secrets.” Most of the time, they are wrong. Almost all businesses have some kind of proprietary information that can qualify as a trade secret, as long as the business reasonably protects that information.
Here are five categories of common information that can qualify as trade secrets, under the right circumstances:
- Customer Information. Many companies spend significant time and money gathering information about their customers. Some maintain simple address and demographic information, while others compile detailed customer databases with order history and precise customer preferences. The more detailed the information, and the more time spent compiling it, the more likely it could be a trade secret.
- Pricing Information. In many industries, pricing information is not publicly known. Such pricing information can qualify as a trade secret, as long as the company reasonably protects it. At a minimum, customer contracts should include a confidentiality provision.
- Profit-Margin Information. Like pricing information, profit-margin information can also be a trade secret.
- Contracts. I’ve had clients who spend years developing proprietary contracts that help them better serve their customers. In these cases, the contract can become a trade secret. Again, a confidentiality provision would likely be required, along with other protections, before a court will recognize a contract as a trade secret.
- Business Plans. Business plans inevitably include some kind of proprietary information, whether it be pricing-related, or market forecasting. If this information is not outdated, and is properly protected, it can be a trade secret.
If your company has one or more of these types of information, it may have trade secrets. But to enjoy protection under the trade secrets act, you must take reasonable measures to protect your information. Consult with an attorney to make sure you’re in the best possible position to protect your proprietary information.