Trade Secrets

Overview

Trade secrets are a lesser publicised form of intellectual property rights but are now gaining momentum around the world.

Any commercially valuable information of a confidential nature is a potential trade secret. Trade secrets are immensely valuable intangible assets that could be stolen. Therefore, it is necessary for businesses to identify and protect their trade secrets under the legal framework.

You deal with all sorts of sensitive information in the business, which may or may not be patentable.  Understandably, an invention before being filed at the patent office is a trade secret. But do you know that even your product road maps and business strategy documents are potential trade secrets? All such information held within your organisation could be protected as trade secrets. Below are some examples of things that could qualify as trade secrets.

• Manufacturing techniques
• Hidden components or undetectable mechanisms in a device (that couldn’t be reverse engineered)
• Chemical formulations and recipes (think of secret recipes of Coca-Cola and KFC!)
• Business plans and product road maps
• Lists of suppliers and customers
• Unfiled invention disclosures

How we can help. We can:

• advise whether something qualifies as a trade secret and how to protect it effectively
• advise whether an invention is best protected as a trade secret or a patent
• advise on disclosing a trade secret to third parties while ensuring its protection
• help you to deal with trade secret theft or breach of confidence
• help you to deal with other parties’ trade secrets disclosed to you in confidence
• educate your employees on protecting trade secrets

EU Trade Secret Directive

The EU adopted a Directive on the protection of trade secrets on 8 June 2016. EU Member states (including the UK) had until 9 June 2018 to implement any legislative changes required in their domestic laws to bring the objectives in the Directive into force.

This directive provides a formal definition of a trade secret. In order to be a trade secret, the information must be:

• secret in the sense that it is not, as a body or in the precise configuration and assembly of components, known among or readily accessible to persons within the circles that normally deal with the kind of information in question; and
• it has commercial value because it is secret; and
• it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Under the Directive, acquiring a trade secret through unauthorised appropriation or copying of documents, files, materials or objects or any use not in accord with honest commercial practices is unlawful.

The Directive also provides an obligation for courts to have a procedure to enable the secrecy of trade secrets to be maintained in the event of litigation to protect or enforce the trade secret.

Trade Secrets in the UK

There are no formal provisions on trade secrets under English law. In the UK, trade secrets are dealt under the law relating to confidential information having developed through case law.

However, a range of remedies exist in the law where trade secrets have been improperly acquired, disclosed or used, which can be very effective. There is no restriction as to the type of information that can constitute a trade secret.

The Trade Secrets Regulations 2018 came into force on 9 June to implement the EU directive.