As the commercial importance of trade secrets comes into the spotlight, we offer guidance as to what they are and how we can help you protect yours.
What is a trade secret?
According to Directive (EU) 2016/943, a 'trade secret' refers to information which:
- Is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
- Has commercial value because it is secret; and
- Has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
In practice, a trade secret can be any confidential information that results in a commercial advantage for its owner. This can be anything from technical information relating to processes and formulations to financial information; from market intelligence to internal company manuals and policies.
Unlike registered IP rights, trade secrets have the potential to last indefinitely. Taking steps to safeguard the knowledge that gives you a competitive advantage is key, not only to maintaining that advantage for the long term, but also in the event of unlawful acquisition of your trade secret by a third party.
The commercial importance of trade secrets is becoming ever more apparent – the US Defend Trade Secrets Act was signed into law in May this year and recently a jury awarded US$ 940 million in damages in a trade secrets lawsuit.
On this side of the pond, a new EU Directive setting out rules on the protection against the unlawful acquisition, use and disclosure of trade secrets came into force in July 2016. Its aim is to set out a minimum standard for the protection of trade secrets, harmonised across the EU. Member States have until June 2018 to adopt the provisions of the Directive into their national law. To ensure your company's trade secrets remain protected in the EU, it is important that you comply with this Directive.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
What we can do to help you
With our extensive experience protecting innovation, we can advise you on keeping your trade secrets safe; for example by:
- Determining what your trade secrets, commercially important know how and confidential information are.
- Advising on establishing and implementing policies to keep these safe and put you in the best position should a breach occur.
- Assisting you with putting in place a strategy for capture, designation and protection of future trade secrets.
- Reviewing and advising on clauses in your employee and third party contracts relating to intellectual property and trade secrets.
- Advising on strategies to protect different levels of confidential information.
- Reviewing and advising on employee access to trade secrets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
