Trade Secrets

A trade secret is a formula, practice, process, design, instrument, pattern, commercial method, or compilation ofinformation which is not generally known or reasonably ascertainable by others, and by which a business can obtain an economic advantage over competitors or customers. In some jurisdictions, such secrets are referred to as "confidential information", but are generally not referred to as "classified information" in the United States, since that refers to government secrets protected by a different set of laws and practices.

Definition

The precise language by which a trade secret is defined varies by jurisdiction (as do the particular types of information that are subject to trade secret protection). However, there are three factors that, although subject to differing interpretations, are common to all such definitions: a trade secret is information that:

• Is not generally known to the public;
• Confers some sort of economic benefit on its holder (where this benefit must derive specifically from its not being publicly known, not just from the value of the information itself);
• Is the subject of reasonable efforts to maintain its secrecy.

These three aspects are also incorporated in the TRIPS Agreement in Article 39.

Protection of trade secret can, in principle, extend indefinitely and therefore may provide an advantage over patent protection, which lasts only for a specific period of time. Coca-Cola, for example, has no patent for its formula and has been very effective in protecting it for many more years than the twenty years of protection that a patent would have provided. In fact, Coca-Cola refused to reveal its trade secret under at least two judges' orders.^[7] The disadvantage is that there is no protection once information protected as trade secret is uncovered by others through reverse engineering, for example, whereas patent has a guaranteed time of protection in exchange for disclosing the information to the public.

referencewikipedia