Protecting the Know-How That Powers Your Competitive Advantage

Unlike patents, trade marks, or registered designs, trade secrets are not registered with an intellectual property office. Their power lies in their secrecy. A well-protected trade secret can potentially last forever - think of the Coca-Cola recipe or Google’s search algorithms. But the moment it becomes public knowledge, its protection is lost.

Trade secrets can be enormously valuable, so having the correct protections and safeguards in place is essential not only to maintain secrecy, but also to enable them to be exploited as a commercial asset.

The role of Trade Secrets in an IP portfolio

Trade secrets can form a critical part of a company’s intellectual property strategy. While patents protect inventions by granting an exclusive right for a fixed period in exchange for public disclosure, trade secrets protect valuable information without ever revealing it to the world, potentially indefinitely, and can be adapted over time.

A strong IP arsenal will often include both patents and trade secrets, each serving different purposes. Generally speaking, patents work best when an invention can be reverse-engineered or when market exclusivity is worth the disclosure. Trade secrets excel when the value lies in keeping a method, formula, or process hidden indefinitely. However, there are some notable exceptions and instances where that is not the case, such as specific industry sectors like defence & security, or circumstances where required market jurisdiction for a patent cannot be achieved due to lack of budget.

In instances where patents cannot be applied to valuable commercial information, such as specific production techniques that employees may have developed, or certain supplier, customer, and market data, trade secrets can offer appropriate legal ownership and protection. Used strategically, trade secrets can complement patents, for example, by patenting the visible aspects of a technology while keeping manufacturing methods or algorithms confidential.

How to protect Trade Secrets

Because there’s no formal registration, protection depends on proactive measures to keep the information confidential. This usually includes:

• Identification – Determining exactly what qualifies as a trade secret within the organisation.

• Access Control – Restricting who can see or use the information, both physically and digitally.

• Contracts – Using robust non-disclosure agreements (NDAs) and confidentiality clauses with employees, contractors, and partners.

• Training & Awareness – Educating staff on the importance of trade secrets and the role they play in the company’s success.

• Security Measures – Implementing physical, IT, and procedural safeguards to prevent unauthorised access or leaks.

• Monitoring & Enforcement – Detecting potential breaches quickly and acting decisively to enforce rights.

Key considerations

• Duration – A trade secret can last indefinitely, but only if secrecy is maintained. One careless disclosure can destroy its value instantly, and therefore a risk based approach and outlook to maintaining such secrets is required.

• Legal Landscape – Many jurisdictions now have dedicated trade secret laws, but enforcement still relies heavily on evidence of protection measures.

• Risk vs Reward – Some innovations are better suited to patent protection, others to secrecy. The decision often comes down to commercial goals, competitive risk, and the likelihood of reverse engineering.

• Exit and Collaboration Risks – Mergers, acquisitions, and joint ventures can put trade secrets at risk if contractual protections are not watertight.

• Human Resources – Given the fluid nature of employment and employees’ exposure to trade secrets, engagement with HR is essential for training, awareness, maintenance of systems, practices, and protocols, and employee contracts.

How we help

Trade secrets can be among a company’s most valuable, and most vulnerable, assets. With the correct identification, protection, and integration into a wider IP strategy, they can deliver a competitive advantage that lasts for decades.

We provide strategic advice on identifying, defining, and documenting trade secrets, and on implementing appropriate measures to help ensure confidentiality is maintained. Our role is to support you in understanding the legal framework surrounding trade secrets, assessing whether particular information is best protected through secrecy or patenting, and aligning trade secrets with your overall intellectual property strategy.

Where appropriate, we can review your existing approach to trade secret management and recommend improvements, ensuring it complements and strengthens your wider IP portfolio.

Contact us to discuss your specific requirements and see how Openshaw & Co. can help you safeguard commercially sensitive information and strengthen your IP protection strategy.

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