Two of the most valuable methods of intellectual property protection are copyrights and trade secrets. While they both safeguard valuable assets, they are legally distinct and offer very different forms of protection.
Entrepreneurs, business owners, and others must understand the differences between copyrights and trade secrets to make informed decisions about protecting their assets.
What follows are five things you should know about how copyrights and trade secrets are different.
How Protection Is Obtained
Copyright:
Copyright exists automatically the instant an original work is created. So, the instant you write a report, design a logo, compose a song, or post an article to your website, you own the copyright. You don’t have to fill out forms or register the work — although registration with the U.S. Copyright Office offers more protection.
Trade Secret:
Legally, trade secrets are not registered. They are kept confidential and unpublished. If disclosed, it will cease to be an enforceable trade secret. Businesses should take proactive measures to safeguard trade secrets.
Bottom line: While copyrights are automatic, trade secrets must be proactively protected.
What They Protect
Copyright:
Copyrights protect original expressions of ideas — rather than the ideas themselves. Books, paintings, computer programs, films, blog posts, and songs are a few examples. Facts, procedures, methods, and systems aren’t covered by copyright — what’s covered is how they’re expressed.
Trade Secret:
Trade secrets safeguard confidential data that offers a company a competitive advantage and is now publicly known. Recipes, manufacturing techniques, customer names, pricing policies, business plans, and source code are included.
Bottom line: Copyrights protect creative expression; trade secrets protect confidential business information of economic value.
Duration of Protection
Copyright:
Copyright lasts forever — typically life plus 70 years for individuals. For corporate works or works for hire, the duration of protection is typically 95 years from publication date or 120 years from fixation date, whichever is less.
Trade Secret:
Protection of a trade secret never expires as long as the information remains confidential. As soon as a trade secret becomes public, protection is lost forever.
Bottom line: Copyrights have a shelf life, but trade secrets never do if they remain secret.
Public or Private Nature of the Asset
Copyright:
Copyright works are public-facing in nature. Books, web pages, movies, and artwork are all intended for the general public. Copyright law encourages the sharing of works with a view toward furthering creativity and innovation.
Trade Secret:
Trade secrets are secret and confidential by nature. They are not disclosed to the public to maintain a competitive advantage. After it has been disclosed by publication, misappropriation, or negligent handling, a trade secret is no longer protected.
Bottom line: While copyrighted assets are usually meant to be shared, that’s not the case with trade secrets.
Legal Remedy and Enforcement
Copyright:
You can sue for copyright violation if someone illegally reproduces or distributes your copyrighted material without permission. Registered copyrights allow you to claim statutory damages and attorney’s fees.
Trade Secret:
Abuse of a trade secret is addressed under trade secret misappropriation law like the U.S. Defend Trade Secrets Act or the Uniform Trade Secrets Act. It is generally enforced on grounds of theft, breach of contract, or industrial spying. The relief provided includes injunctions, financial damages, and criminal sanctions in some instances.
Bottom line: Both offer protection under the law, but the available remedies and enforcement mechanisms are very different.
While both trade secrets and copyrights protect valuable property, they both do so in relatively distinct manners. Copyright is useful for published works, creative work you wish to share with the public, but do not want to relinquish control of. Protection from trade secrets is needed for confidential business information that gives a competitive edge.
Using the proper method of protection is the key to protecting your business’s intellectual properties. It’s worth speaking to an expert in trade secrets and copyrights to help your business make the right moves.
