Dan Forman authored the article “Keeping Trade Secrets Secret to Improve Profitability in the Cannabis Industry,” for the Cannabis Business Times on June 4, 2019.
Excerpt: "Competitors in the burgeoning cannabis industry, like any fast-growing industry, should endeavor to protect their trade secrets—namely the recipes, formulas, methodologies and other information that gives them a competitive edge over the competition. Each proprietor should have a basic understanding for what a trade secret is, how to protect their trade secrets, and what to do if they learn that a trade secret has been stolen as the loss of such information can upend an otherwise profitable business.
Here’s an overview of how to incorporate trade secret protection into your business.
First, What Is a Trade Secret? A trade secret is information that derives economic value from not being known to the public—or to competitors who can obtain their own economic value from the secret—and is maintained in secrecy through reasonable methods.
Unlike other intellectual property that is protected from being copied under trademark, patent or copyright law, the information that is subject to trade secret protection is not available publically and can exist inside people’s heads in addition to other storage devices. There are many aspects of any cannabis business that may be protectable, including: agricultural methodology, manufacturing and processing methods and techniques, anything akin to a recipe or formula for the preparation of final product, as well as internal financial information, personnel information, customer information, pricing information and vendor and supply information.
Are There Laws That Protect Trade Secrets? Many states, including California, and the broader federal government in the U.S. have laws that protect a careful proprietor who makes reasonable efforts to protect their trade secrets. California and many states employ a version of the Uniform Trade Secrets Act, and the U.S. enacted the Defend Trade Secrets Act. Both of those laws allow the owner of a trade secret to pursue a civil claim, including a powerful injunction against a competitor or former employee who steals a trade secret. Moreover, these laws provide for double damages and the recovery of attorneys’ fees in certain conditions."
To continue to the overview of how to incorporate trade secret protection into your business, click HERE.