What’s a trade secret?

by Christopher Graham and Joseph Kelly

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Trade secrets are often a company’s most valuable assets.

Illinois (and most other states) have adopted the Uniform Trade Secrets Act which defines a trade secret as:

information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that:

(1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and

(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality. 765 ILCS 1065/2(d)

In simpler terms, a trade secret is valuable information kept confidential. Common examples are Col. Sander’s recipe for fried chicken and the formula for Coca-Cola.

But most employers aren’t in the fast food or soft drink industry.

A more common example of a trade secret is a customer list.

Is a list that only contains customer names and contact info. publicly available likely a trade secret? No.

But what if a customer list contains other information that makes the list distinctive? Customer lists that include things like sales history, pricing information, contact info. for decision-makers, product preferences are much more likely to be trade secrets.

A company‚Äôs ability to succeed often depends on its ability keep its trade secrets protected. For more information on how to protect trade secrets, please see our post – “Protecting Trade Secrets and Confidential Information”

Tags: Trade secrets, confidential information, customer lists, Illinois, Uniform Trade Secrets Act

Category: Business Law Blog, Employment Law Tracker Comment »


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