A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
By Karen Kitchens, Wyoming State Library intellectual property/documents librarian
“How can I protect information about my business from becoming known to my competitors, who could potentially gain a commercial advantage?” Justine, Casper
As a small business owner, you likely have a wealth of valuable information that if known to your competitors would give them an advantage over you in the business market.
This Intellectual Property (IP) is known as trade secrets. Virtually any type of information may be designated for IP protection. The United States Patent and Trademark Office definition of trade secrets: “Information … can include a formula, pattern, compilation, program, device, method, technique or process. To meet the most common definition of a trade secret, it must be used in business, and give an opportunity to obtain an economic advantage over competitors who do not know or use it.”
In other words, the information derives its economic value from not being known to the public or others and is the subject of reasonable efforts to maintain its secrecy. Both information that is valuable, and information that potentially can be valuable, can be protected. Customer lists, product sales information, financial forecasts or the methods by which you conduct your business are examples.
Trade secrets are protected by both Wyoming law and federal law. Trade secrets are subject to legal protection as forms of valuable property but, only if you, the business owner, have made reasonable efforts to safeguard information secrecy. The criteria of reasonable effort vary with each case.
In general, the following factors are considered when resolving whether information qualifies for trade secret protection: the extent to which the information is known outside the business; when the information is known within the company; the measures taken to protect the secrecy of the information; the value of the information to the company and its competitors; the effort expended in developing the information; and the ease with which other companies could develop the information.
Because the key factor in determining whether information constitutes a trade secret is the secrecy of the information, it is critical that your business develops a program to protect valuable information. There are two ways you can do this: physical measures and written agreements.
For the best protection, employees should sign simple agreements confirming that the company’s information is confidential.
Because trade secrets are likely an essential element of your business, it is important to check with legal counsel to be sure of the specific legal requirements.
A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email wsbdc@uwyo.edu or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.
