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The Lingo of Trade Secrets

June 1, 1994
Related Topics: Miscellaneous Legal Issues, Workplace Violence, Policies and Procedures, Safety and Workplace Violence, Featured Article
Some HR managers may shy away from helping companies protect trade secrets because they dislike all the legal mumbo jumbo. The truth is, the area isn't as complex as it seems. Here's a primer to help the uninitiated unravel the jargon of proprietary property.

Items or information that are secret and for which access is limited to certain people within an organization. Company documents often are marked confidential to denote that they're proprietary. However, confidential information isn't necessarily a trade secret. To be a trade secret, it also must have value to the company's competitors. A confidential customer list, for example, wouldn't be protected if the company's clients were obvious to everyone else in the industry.

An exclusive legal right to reproduce, publish and sell the matter and form of a literary, musical or artistic work. Some companies copyright instruction manuals and training videos.

Intellectual Property:
Ideas, processes, slogans or other intangible property that are created at an organization and give it added value or an edge over competitors. In recent years, this area has stretched. When David Letterman went to CBS from NBC, for example, NBC claimed that his "Top 10 List" and "Stupid Pet Tricks" were its intellectual property because Letterman originated the ideas while working for the network. Showing how hard these types of arrangements can be to enforce, Letterman did a Top 10 List on his first CBS broadcast.

Non-compete Agreement:
A written agreement in which an employee agrees not to compete with his or her employer by working for a competitor or becoming a competitor, usually for a specified period. These agreements often are tied to pay or severance packages.

Non-disclosure Agreement:
A written agreement in which an employee agrees to keep specific information confidential during and after his or her employment, or suffer damages as specified.

A legal right or privilege that gives an inventor the exclusive right to make, use or sell an invention for a specified period of time. Patents can be obtained on products, but often on processes as well, such as a patented process to manufacture a new drug or a toaster.

Trade Secret:
Any formulas, ideas, customer lists, documents or knowledge that are proprietary to an organization and generally not known in the industry. A company generally must make efforts to keep this information confidential and prove that the information gives it a competitive edge.

A registered word or device (logo) that points to origin or ownership of merchandise to which it's applied and gives the owner the legal right to proceeds from making or selling it. In recent years, the use of trademarks has been extended to include such things as ex-Los Angeles Lakers Coach Pat Riley's phrase "three-peat" to denote a team winning a championship three times in a row, and the decor of a Mexican restaurant, termed "trade dress" by a court that ordered it not be copied by another chain.

Personnel Journal, June 1994, Vol. 73, No. 6, p. 100.

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