What is a trade secret?

| Apr 22, 2016 | Trade Secrets

In business, a trade secret is any confidential information that gives your company a competitive advantage within your industry. They are any piece of information that a) is not generally known or reasonably ascertainable by other, and that b) a business takes reasonable measures to protect for economic reasons. A famous example is the recipe for Coca-Cola. That recipe has always been a well-kept secret that has allowed Coca-Cola to earn millions and millions of dollars.

Besides recipes and manufacturing processes, trade secrets can include the way you do business, such as advertising strategies and methods for obtaining sales. If all of this sounds kind of vague, that is because courts determine whether something is a trade secret on a case-on-case basis.

Note that, while some trade secrets may qualify for patent protection, not all trade secrets do. Also, there may be reasons to keep information as a trade secret and not patent it, including the time limit on patents.

After determining whether or not to patent a trade secret, the next step in protecting it is to keep it, well, a secret. Share the secret with as few people as possible, and make it clear to those people that the information is confidential. A confidentiality agreement can be useful for informing people about the importance of keeping the secret. A signed copy would be excellent evidence in your favor of breach of contract, in case the individual ever discloses sensitive information.

If one of your trade secrets ever gets stolen or leaked, you may need to take legal action, because your business’ life could be at stake. A business litigation attorney may be able to help you protect your secrets, and fight against theft.