What Qualifies as a Trade Secret Under Illinois Law?

In this article, you can discover…

• The types of business information that qualify as a trade secret in Illinois.
• How Illinois courts determine whether confidential information qualifies as a trade secret.
• How a business can strengthen trade secret protection and defend confidential data.

What Types Of Business Information Qualify As A Trade Secret Under Illinois Law?

Many things, under the right circumstances, can qualify as a trade secret. Technical data, non-technical data, formulas, recipes, programs, or software could all be considered a trade secret. Unique production or manufacturing methods can also be considered trade secrets. It’s a very broad category.

Determining whether confidential information qualifies as a trade secret in Illinois courts is largely a two-part test.

1. The information must be sufficiently secretive to produce or to result in economic value to you or to your business.
2. You took reasonable steps to protect that information, device, or process from disclosure.

How Does Illinois Law Define And Protect Trade Secrets?

The primary legal source on this matter in Illinois is the Illinois Trade Secrets Act, which describes what may qualify as a trade secret and what civil remedies might be available in the case of the theft of a trade secret. Legal remedies can include injunctive relief, where a court can get involved to stop the trade theft and determine what damages may exist monetarily.

In short, protecting trade secrets in Illinois is a two-step process where the courts first determine if a trade secret was misappropriated (i.e., stolen) and, if so, then determine what remedies are available.

What Common Mistakes Can Cause A Business To Lose Trade Secret Protection?

For the most part, businesses lose trade secret protection because they have failed to protect, secure, or keep that information secret. It often comes down to a lack of organization in advance, such as a lack of non-disclosure agreements between you and internal employees, contractors, vendors, and anyone else who knows about the information you might consider a trade secret.

Practically speaking, non-disclosure agreements should be a part of onboarding new employees as well as a part of their departure from the company.

On a day-to-day basis, you must also have sufficient policies and practices to protect information, such as password-protected servers to help ensure this information does not get out to the public or to competitors. Because if this information becomes generally available, that typically voids trade secret protection, or at least makes it much more difficult to enforce.

Another common mistake is not taking action quickly when you realize that a trade secret is being misappropriated or stolen. Once you realize that information is no longer secure, if you do nothing in response, you have less likelihood of a judge ruling that the information ought to be given trade secret protection.

From a judge’s point of view, if the information is truly important and valuable to you and to your business, it makes sense to act quickly. Failing to act makes it seem as though the information was never truly valuable to begin with and does not deserve the title or legal treatment of a trade secret.

How Can My Business Strengthen Trade Secret Protection And Safeguard Confidential Information?

1. Understand what qualifies as a trade secret and what does not. Next, you need to identify and classify this information within your organization and limit access to it.
   Generally speaking, purely administrative personnel don’t need to know the details of chemical formulas, for example, or the ins and outs of software as it’s under development. So having policies and processes in place to protect the “need to know” standard is helpful.
2. Make sure you have appropriate and very solidly worded non-disclosure agreements and confidentiality agreements for employees and for vendors. These documents should also outline what happens in the event of an unauthorized disclosure.
3. Have strong policies and procedures in place with regard to data security and physical security, password-protect your networks, and take essential steps to protect valuable information.
4. Educate members of your workforce who have access to this information with regard to information security and confidentiality practices. While all employers should have signed non-disclosure agreements, not everyone in the company needs to have access to the same information, so making sure your authorized employees understand not to talk about this information casually at work or outside of the business is important.
5. Finally, have a good, solid business law attorney on your side who can work with you throughout the process and who can point you in the right direction should you have questions.

Still Have Questions? Ready To Get Started?

For more information on Illinois trade secret protections, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 274-6196 today.