In my experience as a San Francisco Bay Area start up company attorney I frequently talk with software developers, technology companies and other inventors and creators who seek to protect trade secrets by use of non-disclosure agreements and compliance with the rules of confidentiality. Trade secrets, confidential information and other proprietary assets must be secured to guard a company's unique competitive advantage.
In my last post entitled IP Protection for San Francisco California Entrepreneurs Part 1: Trademark & Copyright, I discussed the essential characteristics of trademarks and copyrights. In this post, I will describe the defining characteristics of patents and trade secrets.
A patent protects ideas and discoveries and grants a complete right to the profits of an invention by the U.S. Patent Office for a specified time. The criteria for a patent includes, novelty (previously unknown), "non-obvious" (something that an expert in the same field could not identify) and usefulness.
While awaiting federal registration of the patent, the company may mark the designs or product "patent pending". Once the patent has been issued, the product can be marked with "patent" along with the number assigned by the U.S. Patent Office. A patent holder can sell or transfer the patent to another, as long as the transaction is in writing, signed and notarized.
A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers. The recipe for Coca Cola is the most famous trade secret.
For most businesses in California, trade secrets are invaluable assets. Trade secrets afford successful businesses the edge over competitors. This information can be in the form of ideas, devices, business procedures, formulations or recipes. With such intrinsic value at stake, businesses must keep proprietary information confidential and away from unethical competitors.
Companies attempt to protect their trade secrets with the signing of non-disclosure agreements. A non-disclosure agreement is a contract, where the parties agree to keep certain information confidential, shielded from public view.
If that secrecy is breached, the survival of the business itself may be in jeopardy. Conversely, just the allegation of trade secret violations or security breaches can place a business's reputation or a professional's career at risk.
California copyright and trademark attorney Matthew L. Kabak advises SF Bay Area start ups, entrepreneurs, and corporations in IP protection, including all aspects of trademark selection, clearance, licensing, enforcement and trademark protection. Mr. Kabak also advises San Francisco LLCs and other businesses on trade secret protection and copyright enforcement.