Trade secrets is a term for confidential business information. It is a secret belonging to a business. This information grants your company to compete effectively in the market. Trade secrets for SMEs include marketing strategies, product pricing, manufacturing techniques, , company finances, system of doing something, customer/supplier/distributor details, formulae, product design, customer/supplier/distributor details, strategic business plans and other valuable information for the competition in your market. The information has independent, economic and business value. Its value exists because it is unknown to others. The person who holds the information takes measures to protect it as a secret.
Anything that is unique to you and that involves your time, intelligence and effort is a trade secret. Failure to protect your company’s beneficiary information will allow your ex-employees and competitors to reduce your profits and benefits them for using your work. Trade secret prevents wrongful taking of confidential or secret information.
Imagine if one of your top employees left your company. He had learned every major area of your company. Now imagine if that employee set up his/her own business in direct competition with you or joined the company of your toughest competitor. You can stop this if your company protected its business information properly under the trade secret laws.
The advantages of trade secrets include
- Trade secrets have no limited time for protection. As long as the secret is not revealed to the public, it can continue
- There is no registration cost for trade secrets but includes high cost for keeping the information confidential
- Trade secrets have immediate effect
- It doesn’t include formalities such as disclosure of information to government authorities
- SME have a choice to patent the invention or to keep it as a trade secret in the later
The disadvantages are
- It does not provide the right to exclude third parties from making use of it once it is made public
- Anyone may have access to it and use it at will once the secret is made public
- Trade secret protection is considered weak when compared with the protection granted by a patent
- If relevant information has been developed by legitimate means, he/she may patent a trade secret
Competition is the word in the world of business. Protecting your trade secret is very important, if you forget to protect it your idea might become someone else’s. Patents and copyrights protect your trade secrets as well. These protections have a particular time frame, differ from one country to another and from one government to another. Consult legal experts to protect your secrets. Check all the written documents twice to be on the safe side. Before, its too late do everything that is necessary.