Learning about trade secrets
Even without knowing it, you already have a lot of valuable (business) information. This can entail know-how, production methods, client data, marketing strategy,…. These give your company a competitive advantage. To keep this advantage it is important to protect the information through the right means. A simple but effective way to protect this information is to keep it secret. Valuable know-how and business information you keep undisclosed and confidential is referred to as a trade secret. The Coca-Cola recipe, for example, is one of the best kept trade secrets in the world.
Discover more about trade secrets in this guide
- Why do I have to keep information secret ?
- What can be protected as a trade secret ?
- How do you protect your trade secrets ?
- What measures should you take to ensure the confidentiality of information ?
- How long does trade secret protection last ?
- How can I valorise my trade secrets ?
- What steps should I take if my trade secret is infringed ?
Step 1/7 Why do I have to keep information secret ?
The proverb ‘Speech is silver, silence is golden’ often applies in business too. Keeping knowledge or know-how secret gives you (and your company) the competitive edge. This can apply to all kinds of information, from client data or financial information to new ideas. Even business skills or practical experience can be considered strategic knowledge or know-how. Keeping this kind of information secret can prove a very valuable asset and will help you stay one step ahead of your competitors.
Step 2/7 What can be protected as a trade secret ?
Trade secrets can consist of different kinds of information: technical, commercial or financial information; formulas, recipes, source code, etc.
To be considered a trade secret:
- the information must be secret; in other words, it may not be widely known or may not be easily accessible within your area of expertise;
- the information must have real or potential commercial value, which is due to its secret character; and
- the holder of the information must have taken reasonable measures to keep the information secret.
Step 3/7 How do you protect your trade secrets ?
There is no registration procedure for trade secrets. A trade secret is protected once its information is secret, has commercial value, and measures have been taken to keep the information secret. This type of protection lasts until the information is disclosed by you or by someone else.
Therefore, your company policy should include trade secrets and should define the different kinds of information that it covers:
- Knowledge you are willing to share if you get something in return. For example, know-how that you are willing to share for a licence fee;
- Confidential information that you are not willing to share as it gives you an important edge over a long-term competitor;
- Top secret information, such as the Coca-Cola recipe.
Step 4/7 What measures should you take to ensure the confidentiality of information ?
There are various measures you can take:
- Locking areas where confidential information is stored;
- Limiting the number of people who have access to the confidential information;
- Labelling information as confidential.
- Changing passwords regularly;
- Encrypting information in emails and marking them as confidential;
- Limiting digital access to confidential information.
- Ensuring your employees can identify confidential information;
- Granting access to classified information on a need-to-know basis only;
- Including a confidentiality clause in all employment contracts on handling confidential information.
- Using confidentiality agreements (non-disclosure agreements, NDAs for short) when negotiating with other partners;
- Providing proof of confidential information, for example using an i-DEPOT.
Step 5/7 How long does trade secret protection last ?
Protection of your trade secret is not limited in time. It can continue indefinitely as long as you or someone else does not reveal your secret business information to the public.
Step 6/7 How can I valorise my trade secrets ?
You can enhance the value of trade secrets by selling or licensing them to other parties. If you contact other parties, you can use trade secret protection measures (as mentioned in step 4) to stop infringements of your business strategies.
Step 7/7 What steps should I take if my trade secret is infringed ?
An infringement occurs when your trade secret is unlawfully acquired, used or disclosed without your consent. You cannot only act against someone who infringed on your trade secret, but you can also take action against a third party if that third party knows or should have known that the trade secret was unlawfully acquired.
Be aware that there is no infringement of your trade secret if the knowledge was already generally known or if someone acquires the same information independently by doing their own research or work.
Depending on the urgency, you can go to court to request (provisional) measures and to take action for an alleged infringement.
If you discover an infringement, the best course of action is to seek advice from a specialised legal professional.
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