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Business secret

Depending on the type of assets that have to be protected, there are many basic types of intellectual property rights that are used. A trade secret is one type of such protection, and it will be discussed in depth in just this article.

A trade secret is a confidential information procedure that allows the landlord to raise revenues, reduce costs, maintain market dominance, or obtain other economic advantages under certain conditions. As a result, it is viewed as one of the most valuable business intelligence real estate that could be sold or licensed. The notion of proprietary information consists of the production, economic, and technical information, the outcome of the IT sector, as well as details about business methods.

Companies use trade secret safeguards as an IP asset to gain an advantage over their competitors. According to the description, the judiciary protects all aspects of accounting, industry, scientific, technological, institutional, and engineering information. This list is also supplemented with information on sales methods, customer data, technical know-how, research and development, and the market entry concept.

In market economies, fair competition is an important lever for meeting supply and demand, protecting consumer interests, and developing and implementing innovative technologies. Anti-competitive business behavior is regulated by unfair competition and trade secret laws, which are important tools for the efficient functioning of the market. Owners of trade secrets should take all necessary steps to obtain legal protection for their company's trade secrets as their first step.

What information should be safeguarded when safeguarding a company's trade secrets?

Information must meet certain criteria in order to be protected as a trade secret:

  • It has to be trustworthy and private information not only by its owner, but it should also be truly significant and provide some benefits to its owner. In any particular instance, the jury will be able to easily verify the authenticity of the file as well as the measures taken by the holder to protect its secrecy.
  • Transferred under conditions requiring confidentiality: did the recipient know that the information he received is confidential and that he is obligated to keep it confidential? Confirmation can take the form of a signed agreement in writing and non-disclosure, a link to such an agreement, or other means.
  • Classified information has been misused or disclosed, potentially causing harm to its owner. Unauthorized data use is the use of data by a third party without the permission of the owner, as well as the disclosure of information for the purpose of misuse.

Exactly what sort of safeguard does a trade secret offer?

Trade secrets are protected as an IP asset without the need for registration or other formalities. Trade secret legal protection is based on procedural laws for the protection of private information and is part of the broader concept of anti-competitive security.

There are some requirements that information be considered a trade secret and protected indefinitely until it is legally acquired by third parties or disclosed to the public (described below). Lawyers who work in the field of advice on how to protect a company's intellectual property rights can assist you in studying this area in greater depth.

Although only specific circumstances can determine a violation of the protection of trade secrets as a company asset, illegal ways of using confidential information in general include industrial / commercial espionage, non-compliance with the terms of a non-disclosure and confidentiality contract, and stealing confidential information. There are nuances in protecting commercial information, such as when a manufacturing process is protected by a trade secret, but another independent inventor who created it independently can receive patent protection for the company's IP assets or legal protection as a utility model for the same invention.

trade secret

The adoption of measures to protect access to the information which can be classified as a state secret is an essential part in the presence of such information. Special programs that restrict access to employees who do not require confidential material to perform their duties can help with this. It is worthwhile to sign a non-disclosure contract with those who require access to this information, or to include this clause in the employment agreements of such specialists. You can use cybersecurity to protect yourself from hacker attacks.

Trade secret sales and licensing

Because a trade secret is a property right, it can be licensed and sold or transferred to others. Secret information, on the other hand, is more difficult to transfer and license, as well as resolve disputes over violations of confidentiality rights, when compared to a patent.

To evaluate the value and utility of classified material, the licensee must have access to it, which necessitates the signing of a non-disclosure contract with the licensor. To properly formalize such relationships from a legal standpoint, it is best to consult with the appropriate experts – our team of lawyers can assist you in drafting a non-disclosure agreement. Another mandatory requirement imposed by a commercial private information licensor is that the licensee offer effective methods for safeguarding third-party rights for using trade secrets.

Confidentiality agreements are used to safeguard trade secrets

The procedure can be challenging because proprietary information, as a type of company IP asset, is not subject to registration and is of a private nature. To be protected at the state level, most forms of intellectual property must be registered. At the same time, only secrecy or confidentiality is required to safeguard a company's proprietary data as an intellectual property asset. The preceding data demonstrates the significance of a non-disclosure or non-competition agreement in the process of safeguarding proprietary information.

Non-disclosure agreements are legally binding contracts that protect confidential materials, knowledge, and data provided by the parties. Such agreements are used by all participants (people who have the opportunity to learn the trade secrets of partners) in business activities and are one method of protecting the company's trade secrets. Anti-competition contracts are legally enforceable agreements that safeguard companies from unfair competition. The signatories agree not to use the knowledge gained while working for the company for competitive purposes. In this manner, the owner safeguards his company against the disclosure of trade secrets by a resigned employee.

Confidentiality agreements

Consultation with a specialist and request assistance in the development of non-disclosure and non-competition agreements is an effective method of ensuring the protection of trade secrets.

Remedies available to classified information holders

Most jurisdictions' tort law, contract law, and specific unfair competition laws include provisions for legally protecting a company's trade secret as an intellectual property asset.

The injured party has the right to file an application with the court stating:

  • Injunctive relief – a prohibition on the use of information or other actions that the guilty party is required to take.
  • Compensation is given in the amount that should have been paid for the use of the data.
  • Losses are assigned an amount to cover the damage caused by the violator.
  • Income statement – the profit (rather than the amount that will compensate for losses) received by the offender while using classified information.

Patents vs. trade secrets

Patents are legal documents that necessitate the creator to provide detailed information regarding his discovery in return for the exclusive correction to that creation for a fixed period of time. The term of a patent is determined by the jurisdiction in which it is granted; on average, it ranges from 5 to 35 years. Proprietary information protection is an add-on to patent rights. When a patent's validity period ends, the data held inside it loses its protection. The main distinction between patent protection for an invention and trade secrets is the absence of the need to maintain confidentiality.

In trade secret regulations, the term «protected information» has a broad meaning, but what a patent can protect is more limited. The preservation of a company's intellectual property, if it is eligible for protection through patent registration or trade secret protection, will be chosen after considering the arguments and benefits of each possible type of preservation.


A trade secret is a company asset that, like copyright, patents, and trademarks, requires protection. Companies frequently overlook the fact that poor practices or verbal agreements can lead to a lack of trade secret remedies.

Experts from IQ Decision UK can examine a company's confidential information protection procedures, taking into account aspects that courts consider for protection.

Our experts in the field of trade secret protection as an IP asset of a company can provide the following services:

  • Help with licensing know-how.
  • Conducting a comprehensive audit of the company's intellectual property.
  • Assist with the creation of a confidentiality agreement.
  • Assist in the development of strategies to protect the rights to the company's trade secrets.
  • Assistance in resolving commercial disputes.


What exactly is a trade secret?

A trade secret is a concept, method, formula, or pattern that gives a company a competitive advantage in its industry.


What can be considered a trade secret?

Any information that provides the firm with a benefit or a competitive advantage and has monetary value due to its secrecy can be protected as a trade secret. At the same time, an important factor in this is that the owner takes certain precautions to protect this information and keep it secret.


How can trade secrets be safeguarded?

Trade secrets, unlike patents, are protected without the need for registration. This means that trade secrets do not need to be protected by formal procedures. This IP object can be protected indefinitely unless it is discovered, lawfully acquired by others, or disclosed to the public.


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