All too often, we see news stories of high-profile trade secrets disputes involving high legal fees, damage to reputation and, most importantly, a loss of intellectual property (IP) and its related advantages for a business.

Typically, these trade secret disputes involve big-name companies, corporate espionage and national pride, and, as such, are often unrelatable to most business owners. However, trade secret protection should be part of every business plan, no matter the size or type of business.

What would happen if you or your company lost its competitive advantage? Are measures being taken to ensure it is retained? Does your company know where its competitive advantages are derived from?

Many business owners will not realise that the IP the company owns can be a significant value driver to the business.

You have heard it before—Uber® owns no cars; Airbnb® owns no property. They are businesses built on IP. We are in an IP driven economy where a large amount of value in many businesses no longer resides in the bricks and mortar that they own.

All new initiatives start life as a trade secret. The success of a company may depend on how effectively it identifies valuable trade secrets and implements a definable plan for safeguarding such. With proactive management, the enormous benefits that trade secret protection provides can be maintained.

What is a trade secret?

A trade secret can be any confidential information that relates to a new initiative. Some examples of trade secrets of a business are:

  • commercial methods
  • client information databases
  • tooling manufacture and design
  • formulas
  • productions practices
  • efficiency data
  • business methods and operation procedures
  • software code
  • marketing strategy

to name only a few.

Trade secrets are not confined to the IT industry.

Trade secret protection may not last forever. If the information becomes public, then the benefits of this form of protection are lost. Some kinds of information cannot be kept confidential forever, and appropriate timing is required to consider if other types of IP protection are more suitable.

To be a trade secret, the idea or information should:

  • not be known to the public,
  • have an economic benefit and therefore provide an advantage to the owner because the information is not known to the competition,
  • and be maintained as confidential by the owner, i.e. it should be kept secret.

How do you protect your trade secret?

There are many options. It depends on your industry and what the trade secret is.

For example, if your trade secret is a complex moulding technique to make a unique product shape no one else has achieved – or make it more cost efficiently, then keep it confidential. This will require the process to be hidden from public view, a limit to the number of process operators, NDA’s used with contractors that may need to maintain the tooling and more

Teach operators to ensure they are aware of what a trade secret is and how it would affect the company if it were given away. Ensure they know to keep it confidential.

Think about your IP protection strategy at the very early stages of a new initiative and include a trade secret protection strategy. If you don’t, then your long and hard-earned successes may be the starting point for your competition.


By Daniel Hearn and Anton Blijlevens at AJ Park