Many companies have trade secrets to thank for their overwhelming success. The thing with trade secrets, however, is that there is little, if any, legal protection for them if efforts aren’t in place to protect them. If your business is careless or cavalier about safeguarding trade secrets, they could fall into the wrong hands. And there may be nothing you can do about it.
Unless you can prove that your business pulled out all the stops to protect the leaked trade secrets, you might have to take it on the chin.
It’s not necessarily onerous to protect trade secrets — it’s that many businesses don’t understand the ins and outs of keeping their valuable trade secrets…secret.
If your company has valuable trade secrets that must be protected at all costs, the best move is to retain the services of a trade secret expert. If you don’t know what you don’t know, bringing in a professional is a good investment. You’ll get the information and counsel needed to make good decisions. That’ll be especially useful if your trade secrets pertain to software.
Here are three things to know about software trade secrets and how a trade secret expert can help you navigate the process and make good decisions.
You Need to Know What Qualifies as a Software Trade Secret
It’s essential to understand what qualifies as a software trade secret. On the one hand, a trade secret is information that derives independent economic value, is not readily ascertainable by others, and is the subject of tangible efforts to maintain its secrecy. On the other hand, trade secrets of the software variety include source code, internal testing methods, object code, system architecture, proprietary algorithms, design documentation, and development frameworks or tools. You need to know what trade secrets are if you’re going to protect them.
Common Ways Software Trade Secrets Are Misappropriated
If you want to avoid a software trade secret case, it pays to know common ways that these trade secrets are stolen. That’ll help you safeguard against these risks to lower the odds of them occurring.
Trade secret theft can happen through cyberattacks. Hackers know all too well how to create breaches to access algorithms and proprietary code. Internal access abuse is another way software trade secrets are stolen. That can occur if someone in your company with access to trade secret data illegally shares that information. Software trade secrets can also be stolen by former workers or contractors or by business partners past or present. Your company needs to devise policies, processes, and procedures to address all these possible ways trade secrets can be stolen.
Legal Framework for Software Trade Secret Cases
You also should be familiar with specific laws or agreements that govern disputes about software trade secrets. They include the following:
Defend Trade Secrets Act (DTSA): Passed in 2016, the Defend Trade Secrets Act (DTSA) is a federal law allowing businesses to bring their trade secrets to federal court. Businesses are given a broad definition of what qualifies as a trade secret and have access to remedies such as property seizure, injunctive relief, and damages.
Computer Fraud and Abuse Act (CFAA): Pursuant to the Computer Fraud and Abuse Act (CFAA), businesses might be able to, in specific situations like hacking incidents, file claims. The CFAA criminalizes computer-related wrongdoings.
Uniform Trade Secrets Act (UTSA): Most states have some kind of Uniform Trade Secrets Act (UTSA) law, which defines what qualifies as a trade secret and misappropriation.
Contracts and NDAs: Another form of legal protection comes in the form of contracts and non-disclosure agreements. If such pacts are breached, businesses may have grounds to take the matter to court.
Software is not just a product — it’s a competitive advantage. Whether it’s proprietary algorithms, source code, data models, or business logic, protecting your software trade secrets is crucial for maintaining your edge and securing your business’s future.
While this might be a lot to take in, it’s important to know as much as you can about trade secrets. And remember that you can speak to a trade secret expert for detailed answers to any questions you may have.
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