For many businesses, trade secrets are what make their products or services unique; and thus make the company valuable. However, the question of what constitutes a trade secret, as well as what can be done to protect them, can be subject to debate. With that, we offer this post to give a brief definition of what a trade secret is, and to highlight some basic steps in protecting such secrets.
A trade secret is defined as any confidential business information that provides a company with a competitive edge in a particular industry. A trade secret can encompass manufacturing processes, details about how to procure sales, or any other piece of information that is limited in knowledge that gives a business an advantage.
If a trade secret is used (or taken) without the company’s consent, the offended company could seek legal remedies.
But the ultimate question regarding trade secrets is how they can be protected. After all, they are not registered like trademarks or patents, but the benefit of not having formal registration is that the trade secret does not expire. Nevertheless, there are some general standards that should be followed in protecting valuable information. They include:
Making the information a secret – This may seem obvious, but the information must not be generally, or readily known. The information must be kept within a small circle.
It must be valuable – The information must have some value because of its secrecy. Again, if the information was leaked, the value of the company could be compromised.
It must be protected – In addition to keeping the information a secret, there must be adequate protections incorporated to guard against potential leaks.