According to WIPO regulations, a trade secret is an intellectual property right (IP) over confidential information. This confidential information may be sold or licensed to third parties.
Information that qualifies as a business secret needs to meet the following conditions:
• Have commercial value;
• Only known to a group of people, limiting the spread of public information;
• Have the business secret owner take the necessary measures to maintain confidentiality, including the use of confidentiality agreements.
The unauthorized collection, use, or disclosure of a business secret by other parties without the consent of the business secret owner is considered a violation of trade secret protection regulations.
Any business information that is confidential, or carries the confidentiality nature of the company, regardless of importance or size, scope that gives a competitive advantage to a business in the market can be protected under trade secret form.
Trade secrets include technical information, manufacturing processes, test data, designs and drawings of computer programs, and commercial information.
Trade secrets can also be made up of combinations of publicly available components. Thereby, the method of combining to create a certain product and process will also be considered a business secret even though the small parts that make up the final product are in the public domain.
Theft of business secrets includes industrial or commercial espionage, breach of contract, and breach of trust aimed at stealing, disclosing or using another party’s secret, etc.
However, if a trade secret is found by other third parties that are completely unrelated to the original owner of the trade secret, it will not be considered theft of the trade secret, even if Information found is protected information.
To protect business secrets, it is best for businesses to consider hiring or owning a legal team that can draft contracts such as Non-Disclosure Agreements (NDAs), Non-Competition Agreements (NCA), etc. to their employees or partners. The most important thing is that the business has the ability to review the privacy terms and security scope when receiving similar contracts from partners.
Trade secrets are generally very difficult to protect when compared to patents because patenting will allow some form of secrecy to be protected by law. Infringing parties when detected will be sanctioned according to the patent law of that country.
On the contrary, business secrets that are not provided with protection provisions such as contracts when shared with other parties will be very difficult to be protected. For example, Coca-Cola’s secret recipe is considered one of the world’s oldest and greatest business secrets. In the past, a group of employees stole this secret and tried to sell it to Pepsi but the latter did not pay.
If successful, it is highly likely that Coca-Cola can only sanction that group of employees and even Pepsi if they plan to use that secret (they refused to buy the secret and returned the above employees to Coca-Cola). However, if this information is revealed, Coca-Cola can hardly sanction other 3rd parties if they decide to use that secret to create Coca-Cola.
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