In order for a business to grow, its owners need to identify and leverage its competitive advantages.
Trade secrets often form a significant part of a competitive advantage and are therefore critical to a business’ growth and success.
A trade secret can be any confidential business information that provides a competitive edge. This could include formulas, practices, designs, instruments, patterns, or any information that is not publicly known and where efforts have been made by the business to keep it secret.
Commonly cited examples are the exact formula of Coca-Cola and Google’s ever-advancing algorithm. However, your business doesn’t need to be a world leader in order to have and benefit from trade secrets.
Trade secrets are used across a wide range of industries, from manufacturing to technology, and serve as an integral part of a company’s intellectual property portfolio.
Protecting trade secrets is particularly important for businesses which rely on them for their main offering and revenue source. Once they are lost, it is very difficult to keep them private again, often resulting in the loss of a valuable asset.
How are trade secrets protected?
Trade secrets are generally protected through a combination of legal agreements and internal policies by the business which has developed them.
For example, an internal policy might require the secret to be disclosed only to those who need to know it, keeping it otherwise secure through encryption or password protection.
These are typically enforced through contractual agreements signed by parties privy to the secret.
Non-disclosure agreements (NDAs) and confidentiality clauses in employment or partnership contracts are common tools used to ensure that those with access to sensitive information do not disclose it to competitors or the public.
These agreements must be precise and tailored to the specific type of information protected to ensure that your business is fully covered in the event that a secret is released – as those contravening these agreements can be pursued for breach of contract.
Challenges to enforcement
One of the primary challenges in enforcing trade secret legislation lies in the nature of trade secrets.
Trade secrets do not require registration, meaning there is no formal record of the information considered a trade secret.
This can make it difficult to prove that specific information was confidential and proprietary to the business if a dispute arises without explicit contractual agreement.
How can Palmers Solicitors help?
We can advise you on the best approach to protecting your intellectual property and maintaining your business’ competitive advantage.
Trade secrets can be highly valuable but difficult to navigate due to the potential losses if they are exposed accidentally or through breach of contract.
We understand this and can help you legally protect your intellectual property through confidentiality agreements and NDAs.
In the case where a trade secret may have been unlawfully disclosed or used, we can guide you through your options for legal action, including obtaining an injunction or raising a dispute over breach of contract.
For more information on how we can help you and your business, please contact our expert Intellectual Property team today.