In such circumstances, the misappropriation of the information by a competitor or by any third party would be considered a violation of the enterprise's trade secrets. The company should also take reasonable measures to keep the know-how secret, such as putting access control and security measures in place and establishing internal procedures for systematic controlling and monitoring of trade secret information. When dealing with third parties or licensing its know-how, the enterprise signs confidentiality agreements to ensure that all parties know that the secret information must not be disclosed. It makes sure that only a limited number of people know the secret, and those who know it are made well aware that it is confidential. The enterprise in question may therefore value its know-how as a trade secret and would not want competitors to learn about it. Such a process provides the enterprise a competitive edge over its competitors. While the “reasonable” steps may depend on the circumstances of each case, marking confidential documents, placing physical and electronic restrictions to access trade secret information, introducing a systematic monitoring system and raising awareness of employees are the measures taken to safeguard trade secrets.Ī company develops a process for the manufacturing of its products that allows it to produce its goods in a more cost-effective manner. It must have been subject to reasonable steps by the rightful holder of the information to keep it secret (e.g., through confidentiality agreements). It must have actual or potential commercial value because it is secret. For example, trade secrets can be kept by several parties, as long as it is not known to other persons working in the field.
The information must be secret (i.e., it is not generally known among, or readily accessible, to circles that normally deal with the kind of information in question). In order for information to be protected as trade secret, it shall meet the following criteria. For example, if a specific process of producing Compound X has been protected by a trade secret, someone else can obtain a patent or a utility model on the same invention, if the inventor arrived at that invention independently. Since trade secrets are not made public, unlike patents, they do not provide “defensive” protection, as being prior art. While a final determination of whether trade secret protection is violated or not depends on the circumstances of each individual case, in general, unfair practices in respect of secret information include breach of contract breach of confidence and industrial or commercial espionage.Ī trade secret owner, however, cannot stop others from using the same technical or commercial information, if they acquired or developed such information independently by themselves through their own R&D, reverse engineering or marketing analysis, etc. Depending on the legal system, the legal protection of trade secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information.
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