The phrase “trade secret” conjures something that might very well be at the center of a plot in the latest John Grisham novel. And while trade secrets should indeed be carefully guarded, the true definition of a trade secret is much more black and white.
The term trade secret can be used generally when referencing a variety of intellectual property. Some possibilities of intellectual property that may be considered trade secrets include:
- Information; and
- Manufacturing Processes
According to the World Intellectual Property Organization, the broadest definition of a trade secret is, “any confidential business information which provides an enterprise a competitive edge.” What differentiates a trade secret from a patent is that a patent provides protection for the holder of the patent (for a period of time) in exchange for the public disclosure of the information by registration, while a trade secret is protected (potentially forever) by virtue of the fact that it remains secret.
Though the holder of trade secrets must comply with a very strict set of conditions in order to confer legal protection, these may vary from state to state and country to country. However, there are some general concepts that apply in most jurisdictions.
Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights sets forth these general concepts; a trade secret must:
- a. Contain information that is considered secret, is generally known only to a small, select set of individuals, and is not readily accessible;
- b. Have commercial value because it is unknown, or considered a secret; and
- c. Have been kept a secret through reasonable steps and circumstances (confidentiality agreements, for example), by the person lawfully in control of the information.
When trade secrets are not protected through reasonable steps like restricted access and confidentiality agreements, businesses run the risk of losing their competitive advantage. The experienced lawyers at Business Law Southwest will help you protect your trade secrets by providing advice on properly protecting the secrets, including implementing non-disclosure contracts and confidentiality agreements.