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  • Writer's pictureDavid Baker

IP FAQ - What does the law consider a business trade secret?

The definition of a trade secret can vary slightly depending on the jurisdiction, but in general, a trade secret is any valuable information that is not publicly known and provides a business with a competitive advantage. This information can include formulas, processes, methods, techniques, customer lists, pricing strategies, and other proprietary data that gives a business an edge over its competitors.

To be considered a trade secret under the law, the information must meet certain criteria:

  1. Secrecy - The information must not be generally known to the public or easily accessible.

  2. Commercial Value - The information must have economic value because it is not generally known, and it provides a competitive advantage.

  3. Reasonable Efforts to Maintain Secrecy - The owner of the trade secret must take reasonable steps to maintain the confidentiality of the information.

To maintain the confidentiality of trade secrets, a business should consider the following measures:

  • Internal Policies and Procedures. Implement clear policies and procedures for handling and protecting confidential information. Limit access to trade secrets to employees and contractors who need to know the information for legitimate business purposes.

  • Confidentiality Agreements: Require employees, contractors, and business partners to sign confidentiality or non-disclosure agreements (NDAs) that legally bind them to maintain the secrecy of the trade secrets.

  • Physical Security: Secure physical access to areas or documents containing trade secrets. Use locks, access control systems, and surveillance measures to protect sensitive information.

  • Cybersecurity Measures: Utilize robust cybersecurity practices to protect digital trade secrets from unauthorized access, theft, or hacking. This includes encryption, firewalls, secure networks, and regular security audits.

  • Training and Education: Train employees about the importance of trade secret protection and the procedures for handling confidential information.

  • Marking and Labeling: Clearly label confidential information and trade secrets as such. This can help employees identify what information needs extra protection.

  • Vendor and Partner Agreements: When working with external vendors or partners, include confidentiality clauses in contracts to ensure the protection of trade secrets.

  • Limiting Disclosure: Only share trade secrets on a need-to-know basis and avoid unnecessary dissemination of sensitive information.

  • Monitoring and Auditing: Regularly monitor and audit access to trade secrets to detect any unauthorized activities or breaches.

  • Legal Remedies: Be prepared to enforce trade secret protection through legal means, such as filing lawsuits against individuals or entities that violate confidentiality obligations.

Remember that laws regarding trade secrets can differ between countries and regions, so it's essential for businesses to be familiar with the specific laws and regulations applicable to their jurisdiction. Seeking legal counsel to establish and maintain trade secret protection is a prudent step for any business seeking to safeguard its proprietary information.


IP FAQs are provided by attorney David Baker and the Law Office of David Christopher Baker solely on an informational, educational, and entertainment basis only. They are not intended to be and should not be considered or relied upon as specific legal advice. Likewise, no attorney-client relationship is created by virtue of anyone reading them. Should you have a legal question or should you need specific legal advice, then you should consult a local attorney with proper education, training, and experience int eh type of law for which you require advice and representation.

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