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TRADE SECRET GLOSSARY

cease and desist letter A letter from the owner of a trade secret (or copyright, patent or trademark) that requests that alleged illegal activity be stopped immediately

clean room A method of developing proprietary material in which an isolated development team is monitored. The purpose is to provide evidence that similarities to others' works or products are due to legitimate constraints and not copying.

common law  A system of legal rules derived from the precedents and principles established by court decisions.

copyright  The legal right to exclude others, for a limited time, from copying, selling, performing, displaying or making derivative versions of a work of authorship such as a writing, music or artwork.

database  Information of any type organized in a manner to facilitate its retrieval.

declaratory relief  An order from a court sorting out the rights and legal obligations of the parties in the midst of an actual controversy.

diversity jurisdiction Federal courts' right to hear lawsuits based upon non-federal claims; parties must be from different states and the amount in controversy over $50,000.

Economic Espionage Act  A law making it a federal crime to steal a trade secret or to receive or possess trade secret information knowing that it is stolen.

evaluation agreement A contract in which one party promises to submit an idea and the other party promises to evaluate it. After the evaluation, the evaluator will either enter into an agreement to exploit the idea or promise not to use or disclose the idea.

fiduciary relationship When one person stands in a special relationship of trust, confidence or responsibility to another.

generally known  Information is generally known if it has been published or publicly displayed or is commonly used within an industry.

improper means  The illegal acquisition of trade secrets through theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.

inevitable disclosure doctrine  Under this court-made rule, adopted by only a few courts, a court can stop an ex-employee from working for a competitor if the former employer shows that the employee will "inevitably disclose" trade secrets of the former employer.

injunction A court order requiring that a party halt a particular activity. A court can issue an injunction at the end of a trial (a permanent injunction) or immediately, rather than wait for a trial (a preliminary injunction). Two factors are used when a court determines whether to grant a preliminary injunction: (1) Is the plaintiff (the party bringing the lawsuit) likely to succeed in the lawsuit? and (2) Will the plaintiff suffer irreparable harm if the injunction is not granted? The plaintiff may seek a temporary restraining order, which lasts only a few days or weeks. A temporary restraining order may be granted without notice to the infringer if it appears that immediate damage will result-for example, that evidence will be destroyed.

jurisdiction  The authority of a court to hear a certain type of case.

know-how  A particular kind of technical knowledge that may not be confidential but that is needed to accomplish a task.

license  A contract giving written permission to use an invention, creative work, trade secret or trademark, in return for payment.

misappropriation  The theft or illegal disclosure of trade secrets.

noncompetition agreement  A contract in which a person or company agrees not to compete with the business of another company for a period of time.

nonsolicitation provision (also known as a "diversion provision)  An agreement that restricts an ex-employee's ability to solicit clients or employees of the ex-employer.

option agreement An agreement in which one party pays the other for the opportunity to later exploit an innovation, idea or product.

patent  A grant from a government that confers upon an inventor the right to exclude others from making, using, selling, importing, or offering an invention for sale for a fixed period of time.

readily ascertainable  Information is readily ascertainable if it can be obtained legally within an industry, at a library or through publicly available reference sources.

reverse engineering  Disassembly and examination of products that are available to the public.

trademark  Any word, symbol, design, device, slogan or combination that identifies and distinguishes goods.

trade secret  Any formula, pattern, device or compilation of information that is used in business, that is not generally known, and that gives the owner of the secret an opportunity to obtain an advantage over competitors who do not know or use it.

Uniform Trade Secrets Act (UTSA) An act created by lawyers, judges and scholars, and adopted by 43 states and the District of Columbia, in order to conform the trade secret rules of different states (see Appendix A).

work made for hire  (1) A copyrightable work prepared by an employee within the scope of employment; or (2) A copyrightable work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

 

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