Trade secrets are business processes or practices which are not to be known by anyone outside the business. Trade secrets usually come about as the result of internal research and development. Any information considered to be a trade secret can provide a business with a significant competitive advantage.
Trade secrets can be classified as a form of intellectual property rights. As is implied by their name, they are related to confidential information related to a business. Like other intellectual property rights, trade secrets may be sold or licensed if their owner deems such a measure necessary. Trade secrets are usually protected by multiple confidentiality clauses, physical barriers, and non-disclosure agreements.
Information Which Qualifies as a Trade Secret
Not all information related to a business will necessarily qualify as a trade secret. In most cases, the information in question must fulfill specific criteria. The information must have commercial value as a result of its secret nature. It must also be known to a limited group of people. These people will usually be part of the business itself or closely linked to it. In addition, the rightful owner of the information has to be able to take steps to protect it and keep it secret. This may involve the use of confidentiality agreements for employees as well as business partners.
Information Protected by Trade Secrets
Trade secrets offer a great deal of protection for information which requires it. Most of the information which is protected by trade secrets is usually either technical or commercial. Technical information includes information concerning topics such as pharmaceutical test data, designs and drawings of computer programs, and information related to manufacturing processes. Commercial information includes advertising strategies, distribution methods, and lists of suppliers and clients. Some of the other information which trade secrets may protect include source codes, formulas, recipes, and financial information.
It is also possible for the information protected by trade secrets to be made up of a combination of elements. In such an instance, each element of the protected information is available to the public. However, the combination of these elements is kept secret and thus protected.
Protection Offered by Trade Secrets
In most legal systems, trade secrets protect confidential information through the concept of protection against unfair competition. The protection which trade secrets offer can also be linked to case law on the protection of confidential information. Unfair practices which violate the terms of the protection provided by trade secrets include industrial or commercial espionage, breach of confidence, and breach of contract. However, trade secrets do not protect the use of the same information by others if they acquired or developed this same information through independent means.
Trade Secrets in Malaysia
According to Malaysia’s laws, trade secrets must be information which is both confidential and reasonably protected. “Confidential” is defined as not being readily available to individuals engaged in the industry and neither being in the public domain nor having been disclosed to the public. “Reasonably protected” is defined as information which the trade secret’s owner explicitly states to be a trade secret.
In Malaysia, trade secret laws are enforced through contracts rather than through any specific legislation. Any cases related to the violation of trade secret protection are to be taken to the country’s main court system instead of the specialized Intellectual Property Court.
A trade secret is both a great privilege and responsibility at the same time. If your business has any trade secrets, you can use them to provide your business with a powerful competitive advantage, allowing it to stand out and establish itself as a leader in its field. However, if your business has trade secrets but you do not do what is necessary to protect them, you will soon find that your business is at risk of future difficulties because what should have been confidential is now common knowledge. With this fact in mind, make use of trade secrets to guard your business’s private information; do not let them fall into the wrong hands.
This article is brought to you by Exy Intellectual Property Malaysia