Trade Secret Protection in the U.S.

The United States has one of the largest and most competitive economies in the world. In this volatile business environment, it is extremely important to protect trade secrets. Trade secrets, also known as trade secrets, include any type of information that is not public, has commercial value, and is protected by reasonable measures by the owner. In the United States, trade secret protection is primarily based on state law. While each state has specific regulations, in general, the principles of trade secret protection are similar. In addition, the Trade Secret Protection Act (DTSA) passed by the U.S. Congress in 2016 provides additional federal-level protection for trade secrets. Viet An Law would like to provide clients with more information about the protection of trade secrets in the US through the article below.

The concept of “trade secrets” in the US

A trade secret is:

• Information of actual or potential independent economic value due to not being widely known;
• Valid for those who do not lawfully obtain such information; and
• Protected by reasonable measures to maintain its confidentiality.

All three of these factors are necessary; If any element is lost, then the trade secret will also be lost. Otherwise, there is no time limit for the protection of trade secrets.

Forms of trade secret protection in the U.S.

• The Anti-Economic Espionage Act of 1996 criminalized the theft of trade secrets in two cases. The first case is for the subject who “intends or knows that the criminal will commit the act of stealing trade secrets for any foreign government, foreign instrument or foreign agent”. The second crime – theft of trade secrets – deals with theft “that is related to a product or service used in or intended to be used in federal or foreign commerce, for the benefit of anyone other than its owner, and intends or knows that the crime will harm any owner of such trade secret.” These acts are prosecuted by the Department of Justice and can result in imprisonment and/or fines.
• The Trade Secret Protection Act of 2016 (DTSA) amended the Anti-Economic Espionage Act to establish a private civil suit for the unauthorized appropriation of a trade secret. This cause of action provides owners with a consistent, reliable, and predictable way to protect their valuable trade secrets anywhere in the country. The DTSA does not exclude current state trade secret laws, thus providing owners with the option of having a protected trade secret at a state or federal location.

List of documents for registration of trade secret protection in the US

In order to protect a trade secret in the United States, businesses often need to prepare a list of documents that include:

• Detailed description of the trade secret: This is the part of the business that clearly describes its trade secret, including how it is used and its value. Businesses need to present in a specific and detailed way to prove that this information is indeed confidential and commercially valuable.
• Security measures: Businesses need to provide evidence of the measures they have taken to keep information confidential, such as:
  • Non-disclosure agreement (NDA): This is a contract between the business and the people who have access to the information, in which they commit to confidentiality.
  • Technical security measures: For example, using passwords, encryption, restricting access to the system, etc.
• Proof of ownership: The business needs to prove that the business is the rightful owner of this trade secret and that no one else has the right to use it.
• Business context: Businesses need to clearly explain how this trade secret plays an important role in their business. This helps to demonstrate that this information has real value and is not just an idea.
• Potential cases of abuse: If there have been cases where someone has tried to illegally use a business’s trade secret or has behaved in ways that threaten its confidentiality, the business needs to provide information about these cases.

What is different from other forms of intellectual property protection

It is worth noting that, unlike other forms of intellectual property protection, trade secrets do not need to be registered with a government agency in the United States. This means that businesses do not need to disclose their confidential information to be protected. Instead, the business will protect business secrets through documents that the business has prepared and stored at the company.

Term of protection of trade secrets

In the US, there is no specific time limit for trade secret protection. Protection lasts as long as the information remains confidential and has business value. If trade secrets are disclosed or confidentiality measures are no longer maintained, the protection may no longer be effective.

Any inquiries about intellectual property such trademark registration, patent registration,… please contact Viet An Law hotline (+84) 9 61 67 55 66 (WhatsApp, Viber, Zalo, Wechat) for the best support.