In Part One of this article (December 1999), I provided a summary of the protection enjoyed by computer programs under copyright and trade secret law. In Part Two, I summarize how computer programs can also be protected under patent and trade secret laws.
Trade Secrets
Unlike the three other major fields of intellectual property—patent, trademark and copyright—trade secret law has no system of registration. Trade secrets have value precisely because they are secret, and they lose their value, and possibly their right to be protected, if they are carelessly divulged to the public.
Almost any idea, information, program, device or process can qualify as a trade secret, as long as it passes a two-part test. First, it must derive "independent economic value" from not being generally known to the public or to other persons who can obtain value from its disclosure or use. Second, the owner of the idea must make "reasonable" efforts to maintain its secrecy.
An extremely wide variety of ideas, formulas and other kinds of information qualify as trade secrets. A famous example is the secret formula for Coca-Cola. Very few people actually know what it is, and Coca-Cola jealously (and understandably) guards its secret. The recipe qualifies as a trade secret because its very secrecy helps give Coca-Cola a valuable edge over its competitors.
Computer software also can qualify as a trade secret. If the software is disclosed or sold to the public, then it cannot qualify as a trade secret (it isn't secret, after all), but the source code can be a secret. If a person or company uses a computer program only for internal uses, however, it may qualify as a trade secret, as long as it is a secret and is afforded reasonable protection measures.
"Reasonable" efforts to maintain secrecy do not entail armed guards, but they do require reasonable efforts under the circumstances. For instance, suppose a company sells a proprietary computer software program. The program that is offered for sale may be protected under copyright (and maybe patent) law, but it cannot qualify as a trade secret because it is made available to the public. The source code, though, can be a trade secret, as long as the company makes reasonable efforts to keep it secret. Reasonable efforts in this case might involve limiting the number of copies of the source code, limiting the computer drives on which the source code is located, and limiting the access of various persons to the source code. If it is on a computer, then access to the computer should be limited in some way. Absolute secrecy is not required, but reasonable (and preferably documented) efforts are.
One of the thorniest trade secrets issues, particularly in the technology field, is the use by former employees of ideas and methods they learned while working at their previous employer. Generally speaking, confidential ideas and information developed in the work place belong to the employer. The employer has a legal right to stop employees from disclosing such information to the public, or from using such information in competition with the employer if they leave.
Patents
A patent is the most difficult form of intellectual property protection to obtain because it requires the greatest amount of formalities. Unlike copyrights, trademarks and trade secrets, all of which "exist" without formal registration, patent rights in an idea or invention only exist when the U.S. Patent and Trademark Office formally has issued a patent in response to a patent application.
Patents can be obtained for three broad classes of things: useful inventions or processes, asexually reproduced plants and ornamental designs (for this discussion, we'll skip further analysis of plants and ornamental designs). Patents last twenty years from the time of application. Once obtained, a patent confers on the patent owner the exclusive right to make, use or sell the patented invention. A patent owner can sue anyone for an infringing use in federal court under the federal patent laws (patent law is exclusively federal, unlike trademark and trade secret law).
The range of ideas and processes that qualify for patent protection is much narrower than it is for trade secret protection. To qualify for patent protection, an idea must be novel, useful and nonobvious. For example, a business's customer list, if kept secret, can be a trade secret, but it cannot qualify for a patent.
The application of patent law to computer software is very complex. In the 1970s and 1980s, the idea of granting patent protection to computer software met with a great deal of resistance and skepticism. That opposition has faded, however, and today patents for computer programs are frequently applied for and granted.
The problem with granting patent rights for computer programs is that "mathematical algorithms" are not patentable. Under this rule, a computer program that does no more than make mathematical computations is not patentable. But a program that incorporates mathematical computations within a novel and useful process or method may qualify for patent protection.
Once an invention is patented, it becomes public knowledge. So a patented invention cannot also qualify as a trade secret. That poses an interesting choice for the author/inventor: whether to keep the program secret, and forego the protections of patent law, or obtain a patent, and disclose it to the world. On the one hand, patent law provides a more effective menu of remedies for the author/inventor. However, a patent only lasts 20 years, while a trade secret can last indefinitely.
For more information about patents, and for the guidelines that the Patent Office follows in reviewing patent applications, see the U.S. Patent and Trademark Office Web site.
