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A trade secret is a form of intellectual property comprising confidential information that is not generally known or readily ascertainable, derives economic value from its secrecy, and is protected by reasonable efforts to maintain its confidentiality.[1][2][3] Well-known examples include the Coca-Cola formula and the recipe for Kentucky Fried Chicken.
Unlike other forms of intellectual property, trade secrets do not require formal registration and can be protected indefinitely, as long as they remain undisclosed.[4] Instead, non-disclosure agreements (NDAs), among other measures, are commonly used to keep the information secret.[5][6]
Like other IP assets, trade secrets may be sold or licensed.[7] Unauthorized acquisition, use, or disclosure of a trade secret by others in a manner contrary to honest commercial practices is considered misappropriation of the trade secret. If trade secret misappropriation happens, the trade secret holder can seek various legal remedies.[7]
- ^ "trade secret". LII / Legal Information Institute. Retrieved 2024-11-11.
The UTSA defines a 'trade secret' as: Information, including a formula, pattern, compilation, program, device, method, technique, or process that: Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
- ^ "Trade secrets in the EU: What is protected?". Your Europe. Retrieved 2024-11-11.
If you possess valuable information on technology or on any other aspect of your business, you can protect it as a trade secret if the following conditions are met: the information is not known either by the public at large or by the experts of the sector in question[,] the information has commercial value[, and] you have taken steps to keep the information secret: for example, you keep it in safe storage and you have signed non-disclosure agreements with anyone that has access to it or with whom you have shared the information
- ^ Cite error: The named reference
:1was invoked but never defined (see the help page). - ^ "Trade secrets / regulatory data protection". www.uspto.gov. Retrieved 2024-11-11.
All three elements are required; if any element ceases to exist, then the trade secret will also cease to exist. Otherwise there is no limit on the amount of time a trade secret is protected.
- ^ "WIPO Guide to Trade Secrets and Innovation - Part III: Basics of trade secret protection". WIPO Guide to Trade Secrets and Innovation. Retrieved 2024-11-11.
In addition, since confidentiality agreements (or clauses) and non-disclosure agreements (NDAs) are usually effective measures to maintain trade secret information in secrecy, contract law is also relevant to trade secret protection.
- ^ "Trade Secrets, Professional Perspective - Non-Disclosure Agreements and Trade Secrets Protection". www.bloomberglaw.com. Retrieved 2024-11-11.
- ^ a b "WIPO Guide to Trade Secrets and Innovation - Part III: Basics of trade secret protection". WIPO Guide to Trade Secrets and Innovation. Archived from the original on 2024-09-23. Retrieved 2024-12-13.