How Trade Secrets Differ From Other Forms of Intellectual Property

• Jurisdiction: Maryland

II. HOW TRADE SECRETS DIFFER FROM OTHER FORMS OF INTELLECTUAL PROPERTY

Intellectual property encompasses rights associated with patents, trademarks, copyrights, and trade secrets. At their core, laws available to protect these rights seek to balance promotion of the free flow of ideas that spur innovation and new inventions against the financial and personal rewards the creators and inventors receive through exercise of exclusive rights,⁸ a principle firmly established by the Constitution.⁹ Patent and copyright protections fall exclusively within the purview of federal law,¹⁰ while protection of trademarks is governed by federal law and a combination of state statutory and common law.¹¹

Trade secret law was slow to develop uniformity.¹² Its evolution and historical purpose lack the clarity of its intellectual property cousins. It is an outlier among other forms of intellectual property law if for no other reason than its central purpose is subject to varying interpretations: does it exist to recognize property rights, to redress corporate torts and crimes, or something else? The body of law now recognized as trade secret law grew from disparate treatments, as courts were confronted with trade secret claims in the context of property rights, torts, corporate crime, and fiduciary duties.¹³

Unlike patent and trademark law, an owner's rights to trade secrets begin to vest upon creation of proprietary information in the usual course of business operations, and protection remains contingent upon the owner's reasonable efforts to maintain the confidentiality of the information. Unlike the owner of a registered patent, a holder of trade secrets cannot claim rights against a competitor who discovered his secrets independently through proper means.¹⁴

Copyright law protects original works of authorship fixed in a tangible form of expression.¹⁵ Registration of a copyright, although not required, is generally advantageous to the registrant for myriad reasons. Public registration of trade secret rights (if such a thing existed), however, would destroy the secrecy element required to maintain rights in a trade secret.¹⁶ For certain kinds of information, business owners, therefore, may have to choose between maintaining the information as trade secret or registering it as subject to copyright or seeking patent issuance.¹⁷ A good example of this is computer software, which may be subject to copyright, patent, or trade secret protection. Further, if treated properly, as...