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Trade Secrets

A Trade Secret is any formula, process, customer list, or method of operation used in the production of goods or services, needed by the business to perform.

Because copyrights can only be used to protect the expression of ideas in computer software, trade secrets have become important in protecting the ideas themselves.

Companies who create and sell software often use trade secret licensing practices, such as the agreements now commonly found on sealed packages of new software that restrict the user to only consumer uses for the programs. Such agreements, supposedly agreed to by the consumer upon opening the package, may or may not be enforceable in court. However, the general trend among software companies has been to protect the expression of ideas in the software under the copyright law, and to attempt to protect the ideas themselves under trade secret policies.

Moreover, employees owe their employers a duty not to disclose trade secrets. The duty remains even after the job is gone. People can change jobs and join a competitor (unless that is barred in a written employment contract with the prior employer), but they cannot lawfully turn over trade secrets. While this duty of nondisclosure implicitly arises out of, and continues beyond, almost any employment relationship, it can be made more extensive and detailed via express provisions placed in a written employment agreement.