Legal Protection for Trade Secrets

A trade secret is business, financial and technical information kept confidential by its owner through reasonable efforts. Trade secrets are economically valuable because the information is not generally known, and it protects commercially valuable confidential information like business and financial plans, formulas, recipes, and customer information.

For example, Coca-Cola’s soda formula, KFC’s fried chicken recipe, and the source code of Adobe’s Photoshop® software are trade secrets.

Trade secrets are not registered like patents, trademarks, and copyrights. Instead, a business could protect its trade secrets by making reasonable efforts to keep this information confidential, for example, by:

• Never giving your passwords to anyone
• Keeping hard copies of trade secret information in locked files or cabinets
• Never giving confidential information to customers or other individuals outside of the company unless:
  • Authorized by management, or
  • The recipient has signed a written Non-disclosure Agreement
• Employee confidentiality covenants in Employment Agreements

Trade secret protection lasts until either:

• The information becomes publicly available
• The owner no longer derives economic value or business advantage from the secrecy of the information
• The owner no longer takes reasonable steps to keep confidential or protect