Intellectual property is often worth more to a business than its tangible assets. Consisting of business strategies, images, concepts and ideas, lawful protection of intellectual property predates the U.S. Constitution. Now protected by patents, trademarks, copyrights and trade secrets, businesses must take the appropriate steps to ensure that their intellectual property is kept safe from competing businesses, defecting partners and even employees. Becoming informed about the available legal tools can mean the difference between success and failure.
State governments also allow for the registration of intellectual property, although the protection provided is comparatively limited. Furthermore, most state governments will only register trademarks and will not allow the registration of copyrights or patents. In most states, intellectual property registrations are done through the Secretary of State.
A trade secret is any piece of information used by a business that isn't known to the general public, including formulas, business plans, designs and procedures. State and federal laws protect trade secrets when other areas of intellectual property law don't offer adequate protection. An example is the formula for Coca-Cola, which remains a secret despite being over 100 years old. This formula cannot be patented because it is considered a recipe, but it can be protected under trade secret laws.
Trade secret law does not provide absolute protection. While the law prohibits competitors from stealing business secrets, they may be figured out by using reverse engineering. Secrets discovered via reverse engineering and then made public lose their protection. Employers wishing to keep employees from taking trade secrets to competitors should look at the Employee section below.
See how the U.S. Department of Labor formally defines a trade secret: U.S. Department of Labor Definition of a Trade Secret.
Confidentiality agreements and non-compete covenants are most often entered into between employers and employees or business partners. Enforceability of these contracts varies among the states so if you are considering utilizing either, it is recommended that you contact an attorney in your local area.
Confidentiality agreements, also known as nondisclosure agreements, ensure that proprietary information disclosed by one party will be kept secret by another party. Such agreements are often the only method to ensure that employees keep trade secrets, allowing both parties to acknowledge that a duty of confidentiality exists, defining the scope of the duty and spelling out the possible remedies or sanctions associated with the breach of the duty.
The purpose of a non-compete covenant is to ensure that an employee will not compete against an employer or former employer. Since competitors often recruit each other's employees hoping to gain an advantage, these covenants are especially important. Without such a covenant, a top salesperson leaving to work for a competitor may be able to take a list of important clients, thus harming the business of the original employer.
Selecting a Good Lawyer
Entertainment and intellectual property law cover a very broad spectrum of legal issues involving contracts, patents, trademarks, copyrights and more. The level of expertise of lawyers specializing in these areas can vary from generalists in the field to experts in sub-specialties that may range from information technology to entertainment law. See Selecting a Lawyer to learn more about finding the right lawyer for your business.