Trade Secrets: What You Need to Know; The National Law Review, December 12, 2019

Michael J. Kasdan, Kevin M. Smith, Benjamin Daniels,The National Law Review; Trade Secrets: What You Need to Know

"Coca-Cola’s secret formula. McDonalds’ special sauce. Google’s search algorithm. Bumble’s dating software. This proprietary information is vital to these companies’ survival, and among their most valuable corporate assets.  Each is protected as a trade secret.  While patent law offers strong protections for proprietary inventions, obtaining a patent requires establishing that the invention is novel, non-obvious, and patent-eligible. It also requires disclosure of the invention itself in the patent application. And while patents last for twenty years, they do not last forever.  By contrast, trade secrecy provides another avenue to protecting a company’s IP that allows the inventions to be kept secret and potentially protected forever.

In the last few years, businesses, governments, and law enforcement agencies have increased their focus on trade secrets as an effective way of protecting a company’s “secret sauce.” This trend accelerated with the passage of the federal Defend Trade Secrets Act of 2016 (“DTSA”), and trade secret litigation has moved toward the forefront of intellectual property law. As described in recent press, such as Trade Secrets Litigation: The No-Longer-Forgotten Part of the Tech IP Arsenal (Corporate Counsel, Warren, Z., July 28, 2017), “[t]hese days, many of the big IP litigation battles involving companies like Facebook…, Uber … and Epic … have nothing to do with patents, trademarks or copyrights at all. Instead, it's all about the perhaps forgotten part of IP: trade secrets…With massive jury rewards and the DTSA encouraging federal litigation, trade secrets litigation is seeing a surge in the tech industry.” This reporting is consistent with reported industry data. According to a 2016 Report by Willamette Management Associates, the number of federal trade secret cases increased by 14 percent for each year from 2001 to 2012. According to a 2018 Lex Machina Report, this increased even more dramatically with the passage of the DTSA. 2016 saw 860 U.S. trade secret cases filed, but this rose to 1,134 cases filed in 2017. Through the first half of 2018, 581 trade secret cases had been filed, putting the number of trade secret cases filed in 2018 on pace to slightly exceed 2017."

One Year On: Developments in the Protection of Trade Secrets; U.S. Patent and Trademark Office (USPTO), Director's Forum Blog, June 29, 2017

Director's Forum Blog

One Year On: Developments in the Protection of Trade Secrets Guest blog by Chief Policy Officer and Director for International Affairs Shira Perlmutter U.S. businesses own an estimated $5 trillion worth of trade secrets. Their theft, involving losses in the tens or possibly hundreds of billions of dollars a year, poses a serious threat to our nation’s economy. Because the protection of trade secrets — which by their nature are not patented or publicly disclosed — is critical to the commercial viability of many U.S. businesses, Congress passed the Defend Trade Secrets Act of 2016. The law provides trade secret owners with a federal civil cause of action, rather than limiting them to state laws or criminal enforcement. Last month, one year after enactment of the law, the USPTO convened a public symposium on “Developments in Trade Secret Protection.” The event brought together nearly 200 participants, at the USPTO’s headquarters in Alexandria Virginia, and via live webcast to individuals and the USPTO’s four regional offices. Shira Perlmutter at Trade Secrets Symposium The symposium consisted of four panels focused on various aspects of trade secret protection. The first panel, of business economists, discussed recent trends, including how to estimate the value of trade secrets and calculate damage awards in litigation, and how calculating damages in trade secret cases differs from cases involving other forms of intellectual property. The second panel, a group of attorneys, addressed the use of the Defend Trade Secrets Act in practice, including the provisions for ex parte seizure of stolen trade secrets. The third panel, with participants from academia, private practice, and the World Intellectual Property Organization, examined the differing ways in which other countries have implemented trade secret protection and identified the elements that make up an effective regime. The final panel brought together participants from private practice, the U.S. government, and U.S. Chamber of Commerce to role-play as a corporate legal team called on to consider enforcement options for dealing with a case of trade secret misappropriation occurring overseas. The practical information exchanged at the symposium should help governments and trade secrets owners improve protection for this valuable form of intellectual property in the United States and abroad. In helping to take forward the federal government’s 2017–2019 Joint Strategic Plan on Intellectual Property Enforcement, the USPTO will continue its work to promote the adoption of effective systems of trade secret protection and enforcement around the world.Videos of all four sessions of the trade secret symposium are posted  to the Trade Secret Policypage of the USPTO website, as well as additional useful information about the protection of trade secrets. Read more from the Director's Forum Blog

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