Partnership Dispute: Who Owns Trade Secrets When A Company Dissolves?
Trade secrets can be a valuable form of intellectual property (IP). For some businesses, their trade secrets are among their most important intangible assets. The United States Patent and Trademark Office (USPTO), explains that a trade secret can qualify for legal protection under federal law if the following three criteria are met:
- The information has enhanced economic value by being kept confidential;
- Other business could gain benefits if they knew the secret information; and
- Some proactive efforts were made to protect the trade secret.
When partnerships or other businesses dissolve, there may be questions over what happens to a trade secret. You may be wondering: Who owns a trade secret after a business ends? In this blog post, our West Palm Beach partnership disputes lawyers explain the key things to know about trade secrets and partnership dissolutions.
Trade Secrets and Partnership Dissolution: Three Steps to Protect Your Rights
Step #1: Review the Partnership Agreement and Other Contracts
When a partnership breaks apart, the ownership of intellectual property rights, including trade secrets, will depend on the specific circumstances. The single most important thing to do is to review all relevant contracts, including the partnership agreement and other employment-related agreements. In general, these agreements are the basis of each party’s ownership stake in the company. Ideally, there will be some specific contract or contract provisions that deals with intellectual property and/or trade secrets. Though, even if your partnership agreement lacks specific terms, it still provides a basis of your rights.
Step #2: Look for Mutually Agreeable Solutions to Trade Secrets
As noted above, a trade secret only has value to the extent that it is kept confidential. If the proprietary information becomes publicly available knowledge, then there is no more trade secret to protect. The value is gone. For this reason, it is crucial that business partners who are dissolving their business work to find a mutually agreeable solution that protects the confidentiality of trade secrets. A protracted dispute could result in the trade secret becoming public knowledge—which would mean the intellectual property evaporates and no one owns the trade secret.Step #3: Be Ready to Seek Help from a Partnership Lawyer
Ending a partnership is complicated, especially if your company controls a significant amount of intellectual property, including trade secrets. You should be ready to seek guidance from an experienced Florida partnership law attorney. If a dispute arises, your lawyer will be able to protect your legal rights and business interests by helping you take the best course of action.
Schedule Your Confidential Consultation with a Partnership Lawyer Today
At Pike & Lustig, LLP, our Florida partnership lawyers are standing by, ready to protect your legal rights and financial interests. If you have any questions about trade secrets and partnership disputes, we are here to help. Call us today for your strictly confidential case evaluation. From our West Palm Beach office and our Miami office, we handle partnership disputes throughout Florida, including in Jupiter, Fort Lauderdale, Miami Beach, Hialeah, and Hollywood.