Trade Secrets

Trade secrets are important in the development of algae-based fuels, whether or not patent protection is available.  Unlike patents, trade secrets do not expire and can be continued indefinitely, so long as the information remains confidential.  But trade secrets do not prevent third parties from independently developing and using the same information. 

A trade secret is any information, including a formula, method, program, device, process, or technique, that has economic value because it is not generally known and is not readily ascertainable by proper means, provided the owner takes reasonable measures to maintain its secrecy.  For example, the mechanism or the composition of a product that can be reverse engineered is not a strong candidate for trade secret protection.  On the other hand, the mechanism or composition of a product that is a secret and that cannot be determined by studying the finished product would be a good candidate for trade secret protection.  Likewise, the source code for a computer program that is kept secret because the software is only distributed in object code form would be a good candidate for trade secret protection.  And even if a product is not protected by patent law and is subject to being reverse engineered once it is on sale, trade secrecy during the development process will protect the company’s head-start advantage of being the first to market with that particular product. 

Protective Procedures 

The following are suggested steps a company can take to help protect its trade secrets: 

  • Have all employees sign written confidentiality agreements as a condition of employment.
  • Label all written documents, drawings, etc. that are considered confidential with a “confidential and proprietary” legend.
  • Use physical and electronic security to restrict access to sensitive information to those having a need to know.
  • Include the company’s confidentiality policies in employee manuals.
  • Require all third parties who may have access to the company’s confidential information, such as vendors, consultants, and potential customers, to sign written nondisclosure agreements.
  • When an employee leaves, appropriate steps should be taken, such as an exit interview, to collect company materials and to confirm the employee’s obligations as to trade secrets.

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