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What Is A Trade Secret And How It Works In Anaheim

A Quick Intro To Trade Secrets And Misappropriation In California

Businesses strive to differentiate themselves from the competition. That's why they have the right to keep some information secret and can sue anyone who discloses it without permission.

This post will talk about trade secret laws often handled by one of our Anaheim Business Law Attorneys in California.

California business law

What Is A Trade Secret?

A trade secret is a valuable piece of information in the industry but is kept hidden. It is knowledge that has value for its owner and gives them a competitive advantage over their competitors. However, if information considered a trade secret is disclosed, it could significantly negatively impact the company.

Customer lists, information obtained by an employee indicating essential business opportunities, and information provided to an employee in confidence during the course and scope of his job could all be classified as confidential.

Unauthorized use "in a way contrary to honest commercial practices" of "undisclosed information" is protected as long as the information is:

  • It is a secret in the sense that it is not widely recognized or readily available to people who deal with similar information.

  • It has commercial worth.

  • It has been subjected to reasonable efforts to keep it secret by the person in charge of the information.

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The benefits of trade secrets include the fact that they do not need to be registered and have a limited protection frame and the fact that there are no registration charges and no formal compliance obligations to meet. The negative is that once a secret is made public, it can be reverse-engineered, and anyone can utilize the information.

The enforcement of trade secrets is often tricky. It can also be expensive, which is not ideal for small businesses and start-ups. On the other hand, trade secrets can be a beneficial tool for small and medium firms that lack the resources to safeguard their intellectual property assets through different types of protection, such as trademarks and patents, which need registration.

That said, if someone leaks or discloses trade secrets that you have the right to own, you should immediately consult with an Anaheim Business Lawyer. A lawyer will know their way around the law and help you build a solid case against the defendants.

How to Keep Your Trade Secrets Safe

Since trade secrets are crucial, the owner should take as many measures as possible, including:

  • limiting access to secret information, both physically and electronically, to only those who need to know the information;

  • identifying documents as containing private information;

  • Using secrecy and non-disclosure agreements;

  • password-protected information management;

  • shredding or other methods of destruction of private information;

  • conducting departure interviews with departing workers to guarantee that all confidential information in the employee's possession is returned and that confidentiality duties are emphasized;

  • ensuring that employee contracts contain trade restriction provisions;

  • creating third-party due diligence and ongoing monitoring practices;

  • making the security of trade secrets a top priority

It's vital to remember that confidential information that isn't classed as a trade secret can be utilized by an employee for their advantage after employment, as long as it wasn't copied or memorized for use after the employment contract ended.

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However, not every company has the same capability to safeguard trade secrets as big-name corporations. Sometimes, they have to work what they have and have options when someone lets the secret slip. And since the disclosure of these trade secrets can critically affect the company, there needs to be a way for plaintiffs to be compensated for their potential losses.

So, if you have a case of misappropriation of trade secrets, contact an Anaheim Business Law Attorney immediately.


Trade secrets, like trademarks, patents, copyright, and designs, are valuable forms of intellectual property. Therefore, any company must first identify its trade secrets and then implement security methods, such as ensuring that papers are maintained securely and in locations with limited access.

Additionally, agreements with employees should be in place and education regarding what constitutes confidential information and the penalties of disclosing it.

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