When do you protect information as a trade secret? Failure to provide this notice would result in the company not being able to recover exemplary damages or attorneys' fees from the employee if the company were to sue the employee for misappropriation of trade secrets. The law gives an employee and individual independent contractor immunity from civil and criminal liability under state and federal law for disclosing a trade secret if the disclosure was made to report or investigate an alleged violation of law and the new law requires that companies include notice of such immunity in any agreement with an employee or independent contractor that governs the use of trade secret or confidential information. Trade secrets have long been governed by state law with most of the states adopting their own versions of the Uniform Trade Secrets Act (Massachusetts and New York being the only exceptions). On May 11, 2016, the Federal governments enacted the Defend Trade Secret Acts. This new law requires that employee inventions agreements and contractor agreements with individuals (not contractors or consultants that are entities) that are executed or updated ( ie, amendments or modifications to existing agreements) beginning on include notice of certain immunities provided under the law. On the other hand, reverse engineering, unless such reverse engineering breaches an agreement, is not misappropriation. For example, a classic example of trade secret misappropriation occurs when an individual takes confidential information from his employer to start a new company. Trade secret law provides rather limited protection: it prevents the "misappropriation" of the trade secret. Misappropriation of a trade secret requires "wrongful" taking. Consequently, a trade secret can endure forever. Examples of trade secrets include customer lists, source code, and semiconductor manufacturing processes. Trade secrets can include both positive and negative information. For example, the knowledge of which compounds are not effective therapeutic drugs against cancer can be very valuable and save a company tens or even hundreds of millions of dollars. Trade secrets arise automatically if a company takes the appropriate steps to maintain the information as a secret and they continue to be enforceable so long as they meet those criteria. Trade secrets are information of any type that is valuable to its owner because it is not generally known in the industry and its owner has taken reasonable steps to maintain the information in confidence. Among these key assets is the trade secret. Having a good basic understanding of intellectual property protection is essential for entrepreneurs to extract value out of their company's key assets and manage opportunities and risk arising from them. The crown jewels of a typical technology company are often found in its intellectual property portfolio.
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