Trade Secrets

Trade Secrets

Trade secrets in the UK are protected by common law under the law of confidence.

1. What can be protected?

The best way to protect an idea may be to keep it secret. Trade secrets may be used when an invention does not meet the patentability criteria or if an applicant does not wish to go through the patenting process which involves a disclosure process.

Examples of trade secrets include the Coca-Cola recipe, customer lists or sales methods.

2. Duration of protection

As long as they are not disclosed, trade secrets have an infinite life-time.

3. Infringement

Breach of confidence in the UK requires the following elements to be present:

  • The information must have a quality of confidence to it.
  • There must have been an obligation of confidence- express or implied
  • There must have been an unauthorised use of the information

4. Other information

i. Trade Secrets Directive

The European Council and the European Parliament adopted the Trade Secrets Directive in 2016. This aimed to standardise the national laws in EU countries against the unlawful acquisition, disclosure and use of trade secrets.

Under Article 2(1) of the Directive, information will be considered a trade secret if:

  • a.it is secret in the senses that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
  • b.it has commercial value because it is secret
  • c.it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Currently, the UK’s domestic laws far exceed the minimum standard laid out by the Directive.

ii. Practical considerations

  • Understand that trade secrets are valuable only as long as they are not disclosed
  • Differentiate between confidential information and less sensitive information
  • The consequences of breach of confidentiality should be understood
  • Limit access to confidential information only to those who need to know
  • Educate staff about the need to maintain secrecy and how to handle information
  • Employees should sign confidentiality agreements
  • Put procedures and checks in place to ensure the information is kept safe, including the IT systems
  • It is not enough to mark a document as Confidential. When collaborating with 3rd parties, Non-Disclosure Agreements (NDAs) should be used.

Further advice is available from the IPO website.