Trade Secret Protection

Trade secrets are valuable, confidential intellectual property known only by a limited number of persons. A trade secret can be anything from a formula, to a recipe, that gives a company a competitive advantage. The unauthorised disclosure of this confidential information constitutes a violation of the trade secret, and legal action can be taken against this.

Can Trade Secrets be Patented?

Trade secrets and patents vary in multiple ways and may be mutually exclusive; thus, a company may choose whether to have their confidential information protected as a trade secret or a under a patent.

The Difference Between Trade Secrets and Patents

Unlike patents, trade secrets are not a registered right (at least, not in South Africa) and therefore do not have time limitations, and do not need to be renewed over a certain period. Both forms of protection can safeguard similar elements i.e., processes, inventions, compositions. Trade secrets may also protect aspects excluded from patentability like financial information, formulas, and non-technical recipes.

A patent is violated when an outside party replicates or makes use of the patented work without prior consent. A trade secret is considered violated once the confidential information has been disclosed without authorisation – this may be considered breach of confidence.

Unlike with a patent, a trade secret is not protected if an individual develops the same or similar concept or invention by means of their own development and research. A patent can safeguard existing components, but replication of a trade secret cannot be determined as a violation, unless explicitly exposed.

Measures to Protect Trade Secrets

The World Intellectual Property Organisation (WIPO) allow companies to register confidential information on an encrypted digital system which can be used to certify the existence of your trade secret, whilst keeping it protected. Once registered, the system automatically creates a time stamp that cannot be altered. Registration is free of charge.

There are other precautionary methods that can assist with the protection of your trade secrets namely:

• Ensuring that individuals who are privy to the information can be trusted with the confidential information; best practice is to keep the number of people who know the secrets down to a select few who absolutely need to know;
• Restrict access to confidential information using secure means i.e., locking confidential files away securely, and encrypting folders if the information is saved digitally;
• Make use of non-disclosure agreements and confidentiality agreements;
• Safely disposing of confidential documents that could expose trade secrets, e.g., shredding them, etc.
• Ensuring that departing employees who are aware of confidential information are going to continue to withhold that information from unauthorised persons or companies. This can be done by enforcing a confidentiality agreement;

Trade secrets are a valuable form of intellectual property just like trade marks, patents, copyright and designs. In order to protect these forms of intellectual property, businesses may request the help of an intellectual property lawyer to assist with the necessary processes, and enforcement.

Adams and Adams has intellectual property lawyers who specialise in various aspects of intellectual property protection. Contact us for more information.