In the technology world, there are vigorous defenses of aggressive attempts to steal patented or copyrighted materials or processes. There have been several famous technology lawsuits in recent years, most noteworthy was the battle between Apple and Samsung over several iPhone patents that Samsung was found to have infringed in its Galaxy smartphones.
Patent, copyright and trademark litigation is a multi-billion-dollar industry by the time the dust settles every year, and that is especially true in the various tech fields. There has been so much innovation in tech that every company who has a portfolio of patents will fight for them no matter how long it takes or how expensive the litigation becomes.
But what about those things called trade secrets? Many of these are just as important to some companies and industries as patents, but they don’t have the same legal protections. In fact, there was a row in the Apple vs. Samsung case in which one company claimed trade-secret protection when it came to revealing its process in making a patented item, and even a revelation of financial records and/or vendor and customer lists.
Trade secrets are vital to many companies, but there has not been any legitimate legal protection for companies to keep those secrets; if a court demands that information because it is germane to a case, companies are usually forced to give up that trade secret as part of discovery. Therefore, the “secret” no longer exists.
However, there is legislation introduced in Congress that has bipartisan support, called the Defend Trade Secrets Act, which is designed to give companies some legal avenues by which to defend and protect trade secrets from public disclosure. Supporters of the legislation say that protecting trade secrets will encourage and drive more innovation in the industry. Some who oppose it are concerned that the law doesn’t address what it was designed to address, and thus can’t see how it is an improvement over existing law.
Trade secrets can be as much the lifeblood of a company as any of its patents, and that applies to many industries. Here we can give you five industries in particular that could very well benefit the most from the Defend Trade Secrets Act:
- Semiconductors. Silicon wafers have their own trade secrets. The process of making wafers is generally the same, but there may be secrets in how the transistors are made, the circuitry, locations that may make certain wafers operate better or more effectively than others. Vendor and customer lists may also need to be protected.
- Financial services. Many of the investment instruments are the same, but not all brokerage or investment firms operate the same way – their processes for selecting investments may vary widely, but much of it is not guesswork. It is usually a process that makes one investment firm unique from another one.
- Mobile hardware. Whether it’s a tablet, “phablet,” or smartphone, every company has a particular design or feature that it wants to protect, even if it’s not patentable. Perhaps there is a particular secret in how an iPhone is designed, or something about the shape of a Samsung Galaxy that can’t be protected by a patent, but the process should be protected.
- Food service. This can seem pretty obvious – there may be six Italian restaurants in a city and they all may have very similar menus, but each of them has their own unique recipe for each dish that makes one restaurant different from the other. Or maybe it’s the design of the restaurant that should be kept secret.
- Automotive. While many features in a vehicle are patentable, automakers can have different processes for making the vehicles, and those are not patentable but may need to be protected because of any competitive advantage that process may provide.
These are just five prominent industries that would likely see benefit and increased innovation should the Defend Trade Secrets Act be passed into law. There is little doubt that businesses have secrets to their success which separate them from failing businesses in the same vertical, and to maintain that success it may well be necessary to treat those secrets with as much legal value as a patent or copyright.