Can you keep a secret?
Trade secrets are more than secret recipes and formulas
Need to make sure your company's most confidential information stays that way?
Better make darn sure everyone who has access to it knows the importance of secrecy, a pair of local intellectual property attorneys said.
Gerry Blodgett, a patent attorney and president of the Worcester law firm Blodgett and Blodgett PC, and Kathy Chelini, an associate at Mirick O'Connell's Westborough office, said last week that employers need to be savvy about trade secrets law, and how to protect what's theirs.
Last month's sentencing of two former Coca-Cola employees to prison for attempting to sell samples of a new product to Pepsi gave national attention to the little-known - but important - offshoot of intellectual property law.
While most employers are at least somewhat versed in copyrights and patents, few are likely to be able to recite more than the bare-bones principles of trade secrets. Perhaps the most important thing for business owners to know, according to Blodgett, is that just about any privileged information known only to one company can be considered a trade secret, and that, with the right amount of protections, it can be legally protected as such.
"You'd want to use the sorts of physical security you would expect if you were trying to keep someone from stealing your money," Blodgett said.
Customer lists and nut dust
Legally, just about any information a company uses that isn't known to the general public can be classified as a trade secret. Sometimes, products pass the point at which they can be patented, and become simply secrets. Other times, the secrets are made up of information obtained in normal business practice. "(Trade secrets) covers almost the entire range of information that gives a company a competitive advantage that isn't generally known to the rest of the people in the industry," Blodgett said.
In 1984, Peggy Lawton Kitchens Inc. of Walpole sued former employee Terence M. Hogan after he opened a business selling chocolate chip cookies identical to Lawton's highly successful brand, including a secret ingredient: the chaff from walnuts, or "nut dust."
A Superior Court judge ruled that the nut dust-laden recipe qualified as a trade secret, despite the vast majority of it - eggs, flour, chips - being no different from the make-up of most cookies.
What can't happen
Unlike patented products, which can't legally be replicated, trade secrets are fair game so long as they're uncovered properly. Reverse-engineering McDonald's special sauce, for instance, is fine. The trade in and use of trade secrets becomes prosecutable in Massachusetts when they're obtained (or offered) "improperly."That's where things get tricky. Though some cases - bumbling Coke employees trying to sell unreleased product to a competitor - are relatively cut-and-dry, others are far more complicated. That's why, Chelini said, it's so important for companies to emphasize just what is secret, and to go to great lengths to keep it that way.
Blodgett calls it the "theater" of the secrets; the lock-and-key, cloak-and-dagger methods companies use to emphasize that their confidential stuff is just that. It's important, since any indication that information is less than 100 percent privileged can work against a plaintiff in court.
The bigger a show of it all, the better.
"You can't expect somebody to keep a secret unless you make a big deal out of the fact that that's what it is," Blodgett said.
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