Trade Secrets
Do you know about trade secrets? Let’s get an insight into it. Trade secrets refer to intellectual property (IP) rights on important confidential information. It contains the sensitive and private information of any company, which is kept as a secret. Otherwise, the company’s rivals can use this sensitive information and exploit them. Therefore, a trade secret is any sensitive information that is not available outside of the company.
A company or organization tries its best to hide this information from the public because it is a trade secret. Moreover, trade secrets have great significance because it can increase the economic development of the company. That’s why it is kept as a secret and it is the result of the team’s internal research and hard work. The public has not given access to a trade secret, unlike a patent.
Characteristics of a Trade Secret
Trade secrets can be an instrument, pattern, proprietary process, important design, recipe, formula, recipe, process, or method. This can be utilized to create a business venture that provides an economic advantage to the company. A trade secret can be explained differently depending upon the leadership or jurisdiction. Although, the information is considered a trade secret if it has the following characteristics.
- This information is commercially useful and it must be providing an economic advantage.
- This information is available only to a specific group of persons.
- The company’s higher management takes suitable steps to keep this information private. This private information also contains confidential agreements for business partners and employees.
Trade secrets are also called jurisdiction. This includes “classified documents” of the business world like the government agencies protect top secrets documents. As the developmental price of the product is high so companies use an incentive to find the secrets of their competitors. Therefore, to avoid information breaching, top employees of the company sign a non-compete or non-disclosure agreement.
Protection of a Trade Secret
Unlike patents, a trade secret does not require registration. You do not need any long procedural requirements for the protection of a trade secret. Furthermore, this protection of trade secrets is for an infinite time unless the information is breached. In order to avoid this, companies are very serious about the protection of a trade secret.
If a company constructs a process for the development of the products and it produces economical and cheap products.
This process makes a country superior as compared to its other rivals. Now other competitors try their best to know the secret for the cost-effective development of the products. Whereas, the company considers this process as a trade secret and tries its best to keep it personal. The company makes sure that this secret is only known to a few persons. Moreover, when such a company is dealing with a third party, they sign a confidentiality agreement. Hence, the third party will not reveal the trade secret to anyone.
The company also follow a suitable step to keep trade secret confidential. For example, having access control and security measures for the systematic monitoring of the trade secret. Whereas, if a third party or competitor breaches the trade secret then it will be a violation. Although such steps are only helpful if the products cannot be reverse-engineered by the rivals.
Importance of Reverse Engineered Item
If an invention or product can be reverse-engineered then trade secrets are not protected. For example, competitors can copy or imitate a new kind of mousetrap. They can break up the product, thoroughly examine it, and reconstruct it. However, this problem can be solved by patent protection.
Whereas, when an invention or product cannot be reverse-engineered then the protection of a trade secret is very important. For example, let’s assume the formula of Coca-Cola, which is a trade secret for approximately 130 years. No one is able to find that formula because it is a trade secret. Competitors have tried to do reverse engineering but all the efforts are in vain. Reports suggested that Coca-Cola retains various parts of the formula at various places. No one is aware of the complete formula of Coco-Cola. If someone discloses this formula, then Coco-Cola would suffer unbearable loss.
Trade secret Protection Plan
It is very important to keep trade secret confidential otherwise all your business’s uniqueness and growth will be destroyed. If once someone like third party or employees disclose a trade secret, there is no way to protect it. There are the following ways to protect your trade secret:
- Recognize your trade secret.
- Retain trade secret confidential by limiting access.
- You can safeguard your trade secret by contractual obligations.
- Keep secrecy through effective policies.