How do trade secrets differ from patents, trademarks and copyrights?
Trade secrets operate outside the framework of copyright, patent and trademark law so there is no recognized registration processes. Though most states have adopted some form of trade secret legislation, the statutes only provide guidance. Trade secrets are a bit like mercury — both static and ever-changing. One day something can be a trade secret and another day it is not, depending on the owner’s actions. Unfortunately, the courts ultimately make determinations on trade secrets, which is why they are often difficult to identify, value and buy or sell. Why are trade secrets an important issue in mergers and acquisitions? In the context of a merger or acquisition, trade secrets are often assets that contribute to the value of an entity being bought or sold. Not unexpectedly, this is often more important to the buyer who is paying for that value than the seller. No one wants to pay for something that doesn’t exist or can’t be legally protected. In some cases, a buyer will significantly
