Trade Secrets FAQ

Q: What is a trade secret?

A: Information used in business which gives a person a demonstrable advantage can be held as a trade secret. Coca-Cola is a typical example of a formula protected by a trade secret still unknown to the general public — even after about 100 years. The five or so employees who know the formula for Coca-Cola Classic are never allowed together on the same airplane, or even in the same room.

Q: What factors are involved in protecting trade secrets?

A: There are six factors to be considered in order to protect trade secrets:

  1. The extent to which the information is known outside of the business which owns that trade secret

  2. The extent to which it is known by the employees and others involved in the business

  3. The extent of measures taken by the owner to guard the secrecy of the information

  4. The value of the information, both to the owner and to possible competitors

  5. The amount of effort or money expended by the owner in developing the information

  6. The ease or difficulty with which the information could be properly acquired or duplicated by others (IICLE Unfair Competition, 1979)

Q: What if someone discovers a secret through independent research?

A: If a person, without stealing or otherwise getting information from the owner of the trade secret, discovers the trade secret through independent research or other appropriate means, that person is free to use that information. The trade secret is then lost to the owner, and no monetary damages can be obtained from that person.

Q: What about reverse engineering?

A: Reverse engineering is not misappropriation of a trade secret. Reverse engineering involves examining a legally obtained, supposedly protected by trade secret item, and duplicating that item based on that examination alone.

Q: What are some examples of trade secrets?

A: A trade secret may be a formula for a chemical compound; a process of manufacturing, treating or preserving materials; a pattern for machine or other device; or a list of customers. Because of the greater damages that can be awarded, it is best to try to bring a trade secret violation act under the federal statute or 15 U.S.C. 1125(a).

Three types of trade secrets are recognized under Illinois law:

  1. The owner of such information is entitled to protection from tortious misappropriation by competitors. Such an action is usually based on improper means used. Typical examples of means include bribery, theft or industrial espionage.

  2. Most common are cases brought by employers to restrain former employees from dispensing their knowledge of the trade secrets to other people. This action relies on the fiduciary relationship between the fiduciary relationship between the employer and the employee.

  3. There are also actions to enforce the license agreement for a trade secret. These, however, are very rare due to the inherent nature of the confidentiality related to the trade secret.

Q: Does state law play a big role in protecting trade secrets?

A: In Illinois, the state trade secret statute is Illinois Compiled Statutes, Chapter 1065/1 ( 765 ILCS 1065/1 et seq.) and following.

If You Have An Idea And Want To Protect It, We Can Help

Contact us to schedule a free consultation about the protection of trade secrets with an experienced intellectual property lawyer. Call 847-915-4475 or complete the online form.

Free 20-Minute, In-Office Consultation ∙ Evening/Weekend Hours by Appointment