Information considered a trade secret gives the company an economic advantage over its competitors and is often a product of internal research and development.
If a business has a process or information that cannot be patented, copyrighted or trade market, the entrepreneur may still wish to keep the information confidential. In this situation, a trade secret may be helpful. Employees are asked to sign a statement that they will not disclose the information. This becomes a legal contract and violation of that contract is illegal.
In order to make trade secret contract binding, the entrepreneur should first define what is to be protected as narrowly as possible.
If common information is included in the contract, it may be declared void.
Trade secrets may also take a variety of forms, such as a proprietary process, instrument, pattern, design, formula, recipe, method, or practice that is not evident to others and may be used as a means to create an enterprise that offers an advantage over competitors or provides value to customers.
Trade secrets are defined differently based on jurisdiction, but all have the following characteristics in common:
They are not public information.
Their secrecy provides an economic benefit to their holder.
Their secrecy is actively protected.
As confidential information (as trade secrets are known in some jurisdictions), trade secrets are the “classified documents” of the business world, just as top-secret documents are closely guarded by government agencies. Because of the cost of developing certain products and processes is much more expensive than competitive intelligence, companies have an incentive to figure out what makes their competitors successful. To protect its trade secrets, a company may require employees privy to the information to sign non-compete or non-disclosure agreements (NDA) upon hire.
Example of Trade Secrets
A trade secret is any practice or process of a company that is generally not known outside of the company. Information considered a trade secret gives the company an economic advantage over its competitors and is often a product of internal research and development .
To be legally considered a trade secret in the United States, a company must take a reasonable effort in concealing the information from the public, the secret must intrinsically have economic value, and the trade secret must contain information.
Trade secrets are a part of a company’s intellectual property . Unlike a patent, a trade secret is not publicly known.
Important: If a trade secret holder fails to safeguard the secret or if the secret is independently discovered, released, or becomes general knowledge, protection of the secret is removed.
Latest News on Trade Secret
Criminal Prosecution of Chinese Trade Secret Misappropriation
Hope you do enjoy our the concluding part of the Intellectual properties series here on THINK MEDIA NG.
Thanks for reading.-:)