Self-Driving Technology Case Illustrates Importance of Trade Secrets

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A federal jury trial is underway in San Francisco, which is the culmination of a trade secret battle between Uber and Waymo (a Google owned company) related to self-driving technology.  A jury will hear the case in federal district court about whether Uber misappropriated eight trade secrets from a former Google engineer.  The case illustrates the importance of trade secrets, which are one important arrow in the quiver of intellectual property law that a company can use to differentiate and protect its business.

Under both federal and state law, trade secret protections apply to business, financial, and technical information—and, yes, even the literal “secret sauce.”  Trade secrets can include client lists, marketing plans, pricing and discount structures, production processes, chemical formulas (such as a beer or hard cider recipe), or software source code for which:

  • Information is not generally known or ascertainable outside of the owner’s organization and control.
  • The owner derives independent economic value or business advantage from the information not being generally known.
  • The owner makes reasonable efforts to preserve its secrecy.

It is increasingly hard to secure a patent for software technology due to a 2014 United States Supreme Court decision in Alice Corp. v. CLS Bank International.  Thus, trade secrets provide an important avenue for tech companies, as well as many other types of businesses, to protect their intellectual property, and in turn, their business advantage.

Unlike patents (legal protection for inventions), trademarks (legal protection for source identifying information, such as brand names and logos), or copyrights (legal protection for expressive works, such as images, artwork, or literary works), there is no official registration procedure for trade secrets. Trade secret rights are secured by the owner taking reasonable efforts to preserve the secrecy of the information. These efforts could include employment agreements with employees or contractors, or non-disclosure agreements with customers, suppliers, and other parties.  Furthermore, it is vital for the trade secret owner to have appropriate security measures in place at their business including computer network security and confidentiality agreements.

Intellectual property is a vital part of differentiating your business in the marketplace.  Taking early steps to protect your business’ trade secrets and other forms of intellectual property can help prevent business risks later down the road.

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