Listen, do you want to know a secret?

By: Thomas L. Bowden, Sr. This was posted Wednesday, September 16th, 2009

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Do you promise not to tell,
Whoa . oh oh
Closer, let me whisper in your ear….

A recent article in the Virginia Gazette tells the story of a local technology company that is suing its former employees for $3.5 million for the theft of trade secrets. Many business owners are unaware that in today’s world, information, in the form of intellectual property, proprietary data, and just plain know-how, is a valuable capital asset that needs special protections.

So, how do successful businesses protect their intellectual property assets? Is it expensive? Do I have to file a patent? Is any of my information protectable?

These are some of the first questions that come to mind when a business owner realizes how much their business depends on the protection of their proprietary information. In many cases, once information is revealed, there is no practical way to recover the value it had when it was a secret. Fortunately, there are many proactive steps that can be taken at a modest cost to preserve the value of the information, and to preserve the company’s right to sue for money damages if that value is destroyed.

One of the most powerful things a business owner can do is treat the information appropriately. For example, the Virginia Trade Secrets Act provides protection for information that is proprietary to the business, even if it is not copyrightable, trademarkable or patentable. The application of the act is automatic, provided that the information meets the definition of a trade secret and the company treats it as such. To that end, a company should design and enforce policies and procedures to protect the information, and make all employees aware of those policies and procedures, through an employee handbook or other means.

It is also important to recognize the distinction between truly proprietary information, and other information, which, while useful, has no proprietary value. If the policies and procedures define the protected information too broadly, they may not be enforceable in court. Your attorney can help you define these policies, and make these distinctions.

The copyright law provides protection for information the company owns but which must be revealed to the public to realize its value. Like the trade secrets act, the copyright law’s basic protection is automatic. It applies once the “original work” is “fixed in a tangible medium of expression”. In other words, once information is written, stored on a computer, or recorded (as in songs, speeches, etc.), the copyright law will protect the author from unauthorized use. There are additional levels of protection available, however, if the author takes additional steps to register the copyright with the U. S. Copyright Office.

Trademarks and service marks protect businesses from competitors who would “knock off” their products or services, or attempt to mislead customers into thinking they’re doing business with the original company, rather than a competitor. Trademark, tradenames and service marks can be obtained at relatively low cost, under both federal and state laws to protect the owners. It is important to have an attorney familiar with the operation of these laws help prepare the application for protection, however, because the full benefit of protection depends on a proper definition of the market and the use of the product or service to which the mark attaches. A claim that is too broad may not be granted by the US PTO, and one that is too narrow may not capture the full value of the mark.

When most people think of trade secrets, they probably think of patentable inventions. The scope of patent law can include business processes, software, and proprietary methods, in addition to physical inventions or formulas. In most cases, patent applications should be prepared by attorneys specializing not only in patent law in general, but with specific knowledge in the area of technology, science or engineering of the patented device, formula, etc. Lawsuits to enforce and defend patents can be very expensive and may turn on very subtle interpretations of the language in the patent claims.

In subsequent posts, we will examine each of the types of intellectual property protection in more depth, and also discuss how the protection of these assets requires attention in many of the agreements and documents a company normally uses, such as employment agreements, service agreements with customers, joint ventures and others.

The protection of your valuable and, possibly, vital intellectual property requires planning and action. Don’twait until someon firm steals your valuable business ideas or secrets. In the increasingly transparent online world, intellectual property theft is far too common to ignore. Companies should seek the help of good intellectual property attorneys who are well versed in the legal tools to guard your company’s most intangible assets. You can find such attorneys through accountants, bankers or other consultants in your area or by searching,, or Google)

*Incidentally – Apple Corps, The Beatles’ commerial venture, and Apple Inc. fought one of the longest running legal battles over intellectual property, from 1978 until 2007. Don’t let this happen to your intellectual property!

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