R&D Trade Secret Ownership

Dear Rich: In your book, Patent, Copyright and Trademark: An Intellectual Property Desk Reference, you write, "Trade secrets that arise from research and development activities conducted by manufacturing concerns belong to the company sponsoring the research and development." Can you provide any case citations supporting that statement? I'm so glad you asked. As the entry from the book also indicates, these are general rules and dependent upon the circumstances of the trade secret's creation. As the Supreme Court established, trade secret laws encourage research and development by supplementing the patent system and supporting innovators who seek to retain the value of their discoveries. However, to be sure that R&D is owned by the company sponsoring the research, these criteria must be satisfied: (1) the R&D must have commercial value and be unknown by competitors, (2) the information must be treated with secrecy, and (3) the R&D must have been created by an employee within the course of employment or by an independent contractor bound by a nondisclosure agreement. If you're looking for trade secret case citations, the Dear Rich staff recommends R.M. Halligan's "Trade Secrets Case Database." BTW, the Dear Rich staff has created a website where you can find information about trade secrets as well as free NDAs.