A trade secret can be defined as any confidential business information which provides an enterprise with a competitive edge. Trade secrets encompass both commercial and operating conditions of a business and include, for example, sales methods, distribution methods, consumer profiles, advertising strategies, client lists and manufacturing processes. It can be both information documented in some form and non-documented knowledge of individual persons about specific circumstances. Essential for the protection of trade secrets is that the information is actively kept secret.
There is no registration process for the protection of trade secrets. Similarly to copyrights, the information is protected through its creation. Therefore, trade secrets can be protected for an unlimited period of time as long as the information remains undisclosed. In order to keep the information secret, it is important that you implement your own confidentiality strategy.
Trade secret protection can sometimes be a preferable alternative to other intellectual property rights. For example, a patent grants you exclusivity to your invention but is limited to a maximum of 20 years and is conditioned on the publication of the invention. In contrast, for a trade secret the protection is potentially indefinite and the information can be kept secret from your competitors. Depending on your invention, this could give you a competitive advantage for a very long time. As an example, two of the most famous trade secrets of today are Coca Cola’s recipe and Google’s algorithm for its search engine.
In addition to the above, trade secret protection is useful for information, such as client lists or advertising strategies, which cannot be protected as other intellectual property rights. However, it is important to keep in mind that, in contrast to patents, trade secret protection does not grant you the right to stop someone who has come up with a similar invention on their own. In addition, trade secret protection is generally weak in most countries and much less harmonized globally than other intellectual property rights. The protection can therefore vary significantly depending of the country.
Nevertheless, trade secret protection can be used as a strategic tool to assert and protect one of the key assets of your business.
For further information, please contact David Leffler.