Trade secret can consist of any information, facts or knowledge that are significant for the company in terms of competition, can be determined, appraised, and that are not commonly available in relevant business circles. It is the know-how that is essential for a business. Disclosure of such information may help the competing firms to get more market share at our expense.
What does trade secret mean in practice?
This appraisable know-how that can cause a loss of market share if leaked, could be a variety of information, their nature ranging from business to technical, especially:
- Customer list
- Business intentions
- Purchase prices
- Sales prices
- Product Calculations
- Technological procedures
- Building plans
- Industrial designs
- Source code of software
- Plans, drawings
- Public secret (classified information)
- Bank secret
By contrast, there are some limitations to what can be part of the trade secret. It cannot include: * rights of other persons (e.g. someone else’s patents) * realities the concealment of which would be immoral * realities excluded from the trade secret by the law
How to protect trade secrets?
The protection of trade secrets consists of two basic areas. One area concerns the protection and management of access to confidential or sensitive information, the second focuses on legal protection against the misuse of information and know-how acquired by employees during their employment or by suppliers during delivery to another company.
Managing access to the subject of trade secrets (who can access what, who can get what information). This part of protection aims at making sure that unauthorized people cannot access information or knowledge that they should not. This is where the importance of things that define, enable or restrict access to the trade secrets (by technical means) such as job descriptions, permissions and access control, identity management and other, comes from.
Legal protection is used with those people who have access to confidential information in principle or who have knowledge about trade secret. Various legal means like contracts or contracts’ appendices are used to ensure that a particular person is bound to maintain confidentiality. In the event of a breach, sanctions are imposed (a fine or criminal prosecution).
- Confidentiality agreement
- Non-Compete Clause
- Employment contract