b. Software protected by trade secrets
Proprietary source code (as opposed to open-source code) is the principle component of a software program that benefits from trade-secret protection. However, trade secrets also protect the program's design and documentation, including programmer's notes.
For source code, determining a trade-secret violation is relatively simple: compare the code and the length of time required to develop it. Claiming a software-based technique as a trade secret is more difficult to prove: care must be taken to avoid one side mining the source code of the other during discovery and then claiming misappropriation of a trade secret.
To qualify as a trade secret, the proprietary software components must be clearly designated as "secret," and employees, partners, and customers given access to the material must be aware that it is protected. This is often accomplished by requiring them to sign non-compete or non-disclosure agreements.
"When a trade secret is disclosed, even to an employee or licensee, a confidential relationship must exist between the claimant of the trade secret and the parties to whom it is disclosed. There is no implied confidentiality in a relationship between a licensor and licensee. Therefore, it is imperative that all such agreements contain sections dealing with confidentiality of proprietary information."
c. Limitations on trade-secret protections