Intellectual Property Law Reinforces Itself With New Trade Secrets Protection Law

The President and Congress have helped add another protective wall to the realm of Intellectual Property Law this week. The Defend Trade Secrets Act of 2016 is a new federal law created to protect American companies and their trade secrets from corporate espionage and theft. Although trade secrets are protected by most individual state laws, they are not protected by federal law. According to the National Law Review, for the first time, the DTSA will create a federal civil cause of action for misappropriation of trade secrets. The law will hold a provision protecting individuals who disclose trade secret information to their attorneys.

Trade secrets are different in nature from its own Intellectual Property counterparts. Unlike patents, trademarks, and copyrights, trade secrets are registered in public databases. Trade secrets are unknown to the general public. Take for example Coca Cola’s secret formula, or Google’s security algorithms. Although they are known to exist, few know what they actually are and how they are made.

Trade secret protections guard the innovations and creativity of American firms in the United States, allowing for a fair and competitive market that the American economic system attempts to foster. They guarantee a competitive advantage over competitors and ensure a system where innovation is valued. With the rise of the global, digital economy, and the advent of the internet, trade secret threats are at an all time high.

According to Michelle K. Lee, former Director of the US Patent and Trademark Office, trade secret thefts cost U.S. innovators more than an estimated $300 billion in revenue annually. Cyber Espionage has misappropriated trade secrets across state and international borders, potentially undermining national security and weakening the U.S. economy. With the Defend Trade Secrets Act, businesses are now better protected with the support of the federal government.

The National Law Review recommends that all companies consider reviewing and revising their policies and contracts governing trade secrets applicable to employees, contractors, vendors, and service providers. This will ensure that all involved parties comply with DTSA standards.

Thanks to a joint effort by Congress and the President, the Defend Trade Secrets Act of 2016 is now law. This is surely a win for American innovation and trade protection in the United States.

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Protect your Startup with this Intellectual Property Crash Course

There is no doubt that protecting your company’s intangible assets makes for a sound business practice. However, even if you are in the early stages of your business, you should strongly consider protecting your intellectual property. Many infant companies and startups make the mistake of prioritizing their IP last, which often leaves them in difficult predicaments once they are better established. To avoid this, make sure to consult with IP attorneys during your company’s early stages. Until then, here are some informational tips on IP you should consider for your startup.

What is IP?

Intellectual Property – or IP for short – falls into four different categories which include: trademarks, patents, trade secrets, and copyrights. Copyrights protect original works of authorship. The holder of a copyright has the exclusive right to distribute and reproduce the copyrighted work. Patents are exclusive to inventions, granting property rights to the patent holder. The holder automatically excludes others from reproducing, selling, or using the invention without permission. Trademarks are phrases, symbols, or designs that identify with a brand or company. Owners of a trademark can enforce against the use or reproduction of the phrase or symbol. Trade Secrets are unique in the sense that they are not known to the public. A trade secret is a process, formula, or practice that gives a company a competitive advantage over its competition.


Create and use documentation to have a record of contracts and agreements used during the company’s early stages. This will prevent problems with original members that may have helped form ideas in your company. Also keep records of other important dates or milestones in your company to defend yourself in the case of infringement accusations.

Enabling Public Disclosure means that you have shared enough information about your product or service that others within your industry can copy the product. Information can be released in a tech show or exhibition. According to Mary Juetten of Forbes, it is a legal term that many startup leaders learn a little too late. You can no longer patent a product or invention one year after an EPD release.

Confidentiality Agreements are meant to protect your IP. According to Startup Runner, all involved parties should sign a mutual non disclosure agreement before any information on the IP is disclosed. In the case that the IP was discussed without such an agreement, make a detailed list of what was disclosed so that an attorney may assist you in IP protection.

Be sure to check out my twitter @dpeinsipp for more corporate law news and information. Thanks for reading!

This article is intended for informational purposes only and does not constitute legal advice.

Introduction to Intellectual Property Law

Have you ever been interested in intellectual property law? Check out this great CrashCourse production by Stan Muller.

So, what is intellectual property, and why are we teaching it? Well, intellectual property is about ideas and their ownership, and it’s basically about the rights of creators to make money from their work. Intellectual property is so pervasive in today’s world, we thought you ought to know a little bit about it. We’re going to discuss the three major elements of IP: Copyright, Patents, and Trademarks