Trade Secrets

Subject matter of trade secrets is usually defined in broad terms and includes sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes.

While a final determination of what information constitutes a trade secret will depend on the circumstances of each individual case, clearly unfair practices in respect of secret information include industrial or commercial espionage, breach of contract and breach of confidence.

Examples:

• A trade secret is both a type of IP (Intellectual property) and a strategy for protecting your IP. It can provide effective protection for some technologies, proprietary knowledge (know-how), confidential information and other forms of IP.
• A confidentiality agreement is often used to stop employees from revealing your secret or proprietary knowledge during and after their employment or association with your business.
• Make sure you back up your trade secret with signed confidentiality agreements with every person who has knowledge of the secret.
• If an agreement is breached, you will have evidence of what was agreed and protection through the law.
• Perhaps your IP is unlikely to result in a remittable right, or maybe you want to retain exclusive use beyond the term of a patent.

A trade secret strategy is appropriate when it's difficult to copy the construction, manufacturing process or formulation from the product itself; that is when reverse engineering is unlikely.

Be aware...

• Secrecy does not stop anyone else from inventing the same product or process independently and exploiting it commercially. It does not give you exclusive rights and you are vulnerable when employees with this knowledge leave your firm.
• Trade secrets are difficult to maintain over longer periods or when a larger number of people are made privy to the secret.
• Proving a breach of confidentiality under common law can be complex and is potentially more costly than defending registered rights.
• Ask contractors and employees to provide written undertakings not to compete with your business after they leave in addition to signing a confidentiality agreement. It is often much easier to prove this than to prove breach of confidentiality. These undertakings, however, are difficult to enforce and need to be prepared by your legal adviser, as you need to be careful that the undertaking does not restrict the contractor's or employee's right to earn a living.
• Common law provides protection for infringement of trade secrets, breach of confidentiality agreements and passing off trade marks.

It is wise to ask employees and vendors to present written deeds not to compete with the company when they quit and to sign a confidentiality agreement. It is usually easier to show this than to demonstrate a violation of privacy. These happenings, although, are harder to do and need to be presented by a legal represented, as you should to be certain that the task does not stop the vendor's or crew's right to make a income.

• Trade Secrets
• Trade Secrets Law
• Trade Secrets Act
• Trade Secret Protection
• Trade Secret Misappropriation
• Theft of Trade Secrets
• What is a Trade Secret
• Trade Secret Definition
• Protect Trade Secrets