Proprietary information is information regarding a company’s strategy, customers, or PRODUCTs that, if divulged to competitors, would harm the company. Businesses go to great lengths to protect their competitive advantage. PATENTs are often used to protect inventions and technology, noncompete clauses in EMPLOYMENT contracts are used to protect INTELLECTUAL PROPERTY, and security measures are used to limit MARKET INTELLIGENCE and corporate espionage. Proprietary information can also include the minutes of corporate meetings and even simple items like with whom a corporate executive is meeting. With the rise of technology-based enterprises in the United States and the rapid turnover of workers in the industry, concerns over the loss of TRADE SECRETS and other proprietary information have expanded. Customer lists, technical data, and top-secret research-project information are critical to a company’s long-term success but also easy to carry in electronic files. Chemical formulae are often trade secrets; customer lists that could be recreated by looking in the phone book are not generally recognized as trade secrets. Reasonable steps must be undertaken by businesses possessing and claiming protection for proprietary information. Unlike patents, COPYRIGHTs, and TRADEMARKs, which can be registered with governments in order to protect a company’s rights, disclosure of proprietary information would eliminate its value. However, proprietary information can, if protected, last forever, something that is not true of patents and copyrights. The world’s best-kept trade secret, for example, is probably the Coca-Cola formula. Many cases concerning proprietary information wind up in the courtroom, and judges often question what is truly proprietary. In 2002 Wal-Mart won an appeal of a case brought by a company claiming Wal-Mart had used its proposal to handle credit transactions when negotiating a CONTRACT with another company. The court ruled that the proposal was a common wholesale practice and not proprietary information. However, courts have also tended to reject noncompete clauses in contracts when they are too restrictive and limit an individual’s ability to earn a living.
See also ECONOMIC ESPIONAGE ACT.