What is a Trade Secret

Like many legal concepts, the precise definition of "trade secret" is one that tends to have ill-defined borders. As more than one federal appellate court has observed, a secret "is one of the most elusive and difficult concepts in the law to define."51 Different jurisdictions approach the question differently and have a variety of nuances in the language that they use. At its core, though, there are generally three requirements for some piece of information to be considered a trade secret: (1) it must not be generally known, at least to the relevant portion of the public; (2) its secrecy must provide its owner with some economic benefit; and (3) there must be reasonable efforts made to maintain its secrecy. Within this definition, there are a host of different kinds of information that have been recognized as being trade secrets.

Many of the categories of trade secrets are relevant to any type of company or organization, including nanotechnology companies. Such information as the identities of customers and customer preferences, the identities of vendors, marketing strategies, and company finances is information that almost no one would consider making publicly available unless subject to some legal requirement to do so.52 These kinds of information are also the sort for which other forms of intellectual property offer no meaningful protection so the decision to maintain them as trade secrets is an easy one.

Other categories of trade secrets have more particular relevance to nano-technology. These include information about certain kinds of manufacturing processes, research data and analysis, and testing protocols. In many instances, the decision whether to maintain this type of information as a trade secret is less clear. For example, a legitimate question may be raised about whether to keep a certain manufacturing process secret, thereby running the risk of its independent discovery by a competitor. The alternative is to attempt to patent the process, which has the advantage of providing a mechanism for preventing competitors from using it. Similar considerations may apply to testing protocols, although in most cases the kinds of factors that weigh into the decision argue more in favor of keeping such protocols as trade secrets. In purely commercial contexts, it is often also advisable to keep underlying research results secret, although other factors frequently prompt disclosure of at least some of that information. Those who develop nanotechnology in academic settings are particularly subject to pressures to disclose results since they are often evaluated on their publication records, and both academics and researchers in small companies are frequently supported by government funds that include disclosure requirements.

While these kinds of information have the potential to be identified as trade secrets—and thereby to enjoy the protections that the law provides to trade secrets—any of the three factors listed earlier has the potential to disqualify the information. This is perhaps best understood with a specific example. Consider a nanotechnology company, NanoD, that produces den-drimers for drug-delivery applications. A dendrimer is a type of polymer molecule that has a branched structure like that shown in Figure I.26. From

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