Protecting proprietary information is critical to construction firms. If a construction business has valuable and confidential business practices that benefit their services, this is a significant advantage over their competitors. Of course, if these “trade secrets” were disclosed with a competitor, the value of these important assets could be compromised. Unfortunately, many contractors don’t realize that if they fail to properly protect their trade secrets through several legal devices, the confidential information could be used for profit by their competitors.
In this four-part article, the Clearwater construction attorneys at Cotney Construction Law will discuss how to protect confidential information from being divulged. Remember for any of your construction business legal needs, an attorney is standing by.
What Exactly is a Trade Secret?
The U.S. Food and Drug Administration’s Title 21 defines a trade secret as “a secret, commercially valuable plan, formula, process or device that is used for the making, preparing, compounding or processing of trade commodities, and that can be said to be the end product of either innovation or substantial effort.” In layman’s terms, a trade secret is a valuable piece of information that a company created that they want to remain private for their benefit. Moreover, if this information is divulged to a competitor, it can create irreparable harm to the company that developed this intellectual property.
Determining What Exactly is a Trade Secret
In order to define what is truly a trade secret, here are some basic requirements:
- Is the information truly confidential? The information must be considered exclusively private to the creator and the select parties they elected to share the information with. If this information is public knowledge, it’s not secretive in nature.
- Is the information known by all of the employees of the company including ones that are not part of any type of confidentiality agreement? In other words, if every employee of a company is aware of it, it may not be considered classified information.
- Does the information have economic value to the company that possesses this information? This means the information is not only profitable but if it is obtained by a competitor this would financially impact the company that developed this information.
- Has the company put forth a considerable effort to secure this information from being divulged? If efforts were made to protect the information and these efforts were thwarted, you should immediately contact a Clearwater construction attorney.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.