Trade secret, also known as confidential information or classified information, is a very important type of intellectual property right. It is defined as a formula, practice, process, design, instrument, pattern, or compilation of information that is not generally known to public. Trade secrets play a key role in gaining economic advantage over competitors.
The 3 most important factors that are considered for determining whether a business secret qualifies for trade secret protection are as follows:
1. Information is not generally known to public
2. Reasonable efforts have been taken to keep the information a trade secret
3. Economic value is associated with the information
The best way to protect a trade secret is through non-compete and non-disclosure contracts. A trade secret is confidential information about your business that is valuable because it is a secret and you have make efforts to keep it a secret. A trade secret has no time limit and they last as long as they are valuable and you keep them secret. If a trade secret is stolen, you have the right to file a law suit. An excellent example is the formula for Coca-Cola. The recipe of 11 herbs and spices for Kentucky Fried Chicken is another good example. Information such as a marketing strategy, financial, technical, customer list, etc. of a company also qualifies for trade secret protection.