Are you the owner of a valuable trade secret that you now want to transfer to a third-party, or possibly pass down to your loved ones?
The good news is that trade secrets are considered personal property in the eyes of the law and therefore can be sold, gifted, or even left as part of an estate after the death of the owner. Here’s what to know when considering the sale or transfer of any trade secrets you may have access to.
Does the Trade Secret Need to Be Registered with the Government to Sell or Transfer it?
No. Trade secrets are different from all other forms of intellectual property like patents, trademarks, and copyrights in that they do not have to be registered with the federal government for protection. There is no type of registration or legal permission necessary to transfer or sell a trade secret.
What If I Don’t Want to Give Up Complete Ownership?
Because trade secrets are considered personal property, they can also be licensed to a third-party who agrees to use your proprietary processes or methods in exchange for a specific fee or continuing royalty. It’s important to enter into a confidentiality or other agreement with caution and with the help of a trusted attorney, as the more people who know the “secret” the more likely that it could be disclosed (which would cause it to lose all value).
What Happens to My Trade Secrets When I Die?
If you are the owner of a trade secret, such as a unique recipe or a special software algorithm, you may want to ensure that your family continues to benefit from the value that trade secret brings when you are gone. As such, you may want to speak with an attorney who focuses on estate planning to ensure that your intellectual property is being passed down in a safe and secure way using a will or trust.
Is There a Time Limit? Can My Trade Secret Expire?
The good news about trade secrets is that they do not expire. As long as they are kept a secret, and people are interested and willing to pay for the offering, a trade secret will continue to hold its value. Therefore, if you are thinking about selling or transferring your trade secret, there is no specific time frame or expiration date to factor into your decision-making process.
Have Additional Questions About Trade Secrets?
Our intellectual property attorneys are here to help. We invite you to contact us at 888-666-0062 and we’d be happy to meet with you at our Charleston office by appointment, or via phone or video conference for clients anywhere else in the United States or across the world.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.