Let’s Keep it a Secret

On June 6, 2013, I had the opportunity to attend a spirited panel discussion about trade secrets.  The session, titled “Let’s Keep it a Secret:  Protecting, Valuing and Licensing Trade Secrets,” was hosted by the New York City Chapter of the Licensing Executives Society and Fox Rothschild LLP.  The panel and audience of licensing professionals debated issues ranging from “why treat trade secrets differently from any other confidential information,” to “how can you make money licensing trade secrets?”

Moderated by patent and licensing attorney Janet MacLeod, Ph.D  of Fox Rothschild, the panelists included:

Moderator Janet MacLeod started the discussion by asking whether the recent media and court attacks on software patents and gene patents could make trade secrets even more valuable.  With the panelists generally agreeing that the answer was “yes,”, tips from the panelists included:

David Shofi explained that corporate employees who have access to trade secrets need to keep three things in mind:  (1) Identify each trade secret so that you know what’s important to the company; (2) Mark each trade secret as such (and be consistent in the way that you do it); and (3) Limit access to those individuals who truly have a need to know the secrets.

Bruce Berman noted that in patent licensing transactions, the most valuable transactions bundle patents with trade secrets or other know-how.  He also noted that may companies have large patent portfolios, but the trade secrets and other forms of intellectual property are the most valuable intangible asset of the company.  Examples included Coca-Cola, with an extremely valuable trade secret product formula, and Intel, where the “Intel Inside” is arguably more important to consumers than any individual patent.

Finally, Chris Kinkade explained that not all confidential information is a trade secret, and there may be good reason to treat the two categories in information differently. A company may hold a huge amount of confidential information, but not all of it gives the company a competitive advantage.  Indeed, Kinkade explained that some state laws (including those in New York) do not consider confidential information to be a trade secret unless the company is actually using the information in its business.

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