USA Law and Practice Contributed by: Claudia Ray, Joseph Loy, Brandon R. Weber and Andrew (Keum Yong) Lee, Kirkland & Ellis LLP
with non-disclosure agreements, company poli - cies or alternative safeguards that maintain the confidentiality of the trade secrets. 1.10 Licensing A trade secret owner has a right to license the trade secret to a licensee through a contract or licensing agreement. The licensee may pay the trade secret owner royalties in exchange for using the trade secret. The trade secret owner must still take reason - able steps to maintain the secrecy of the trade secret in order to retain trade secret protection. See Turret Labs USA, Inc v CargoSprint, LLC, 2022 WL 701161, at *2–3 (2d Cir. Mar. 9, 2022). For example, the licensing agreement may con - tain a confidentiality restriction or a non-disclo - sure provision. The licensing agreement may require the licen - see to pay the trade secret owner royalties even if the licensed information is no longer suffi - ciently secret to qualify as a trade secret, unless the agreement specifically states otherwise, depending on state contract law – eg, Nova Chemicals, Inc v Sekisui Plastics Co, 579 F.3d 319, 328 (3d Cir. 2009) (“ Trade secret licenses may endure even where the trade secret itself is destroyed by general disclosure ”); Warner- Lambert Pharm Co v John J Reynolds, Inc, 178 F Supp 655 (S.D.N.Y. 1959), aff’d, 280 F 2d 197 (2d Cir. 1960). 1.11 What Differentiates Trade Secrets From Other IP Rights One primary difference between patent and trade secret protection is public disclosure. Unlike a trade secret, which does not have to be registered and cannot be publicly disclosed, patents can only be obtained by applying to the United States Patent and Trademark Office.
During that process, the patent application and granted patent will be disclosed publicly. Once the individual’s patent application has been granted, the patent provides a 20-year monopoly right from the filing date of the earli - est priority application, after which the patented invention enters the public domain and may be used by anyone. Because of this mandatory disclosure, protecting information as a trade secret may be preferred to protecting it via patent. One disadvantage, however, is that although they can theoretically be protected indefinitely, trade secrets – unlike patents – can be independently discovered or reverse engineered, after which there may be no further protection. 1.12 Overlapping IP Rights In the USA, patent, trade mark, copyright and trade secret are separate and independent forms of legal protection for intellectual property. Plaintiffs can, and do, frequently assert claims under more than one of these legal protections simultaneously, based on the same or related conduct. An individual cannot seek both patent and trade secret protection for the same information. They may, however, obtain overlapping rights in a sin - gle product, such as protecting the design of the product with a patent while protecting the composition of the product as a trade secret. Copyright and trade secret laws may overlap in the computer software field since computer soft - ware may receive protection from both. Process - es implemented via software may also receive patent protection, though this has been more heavily scrutinised by courts in recent years.
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