Trade secrets are information which a company keeps secret. In order to be considered a trade secret, the information must concern commercial or operating circumstances which, if they were to be disclosed, would harm the company.
The information can be documented, e.g. in the form of drawings or models, or it could quite simply be something that only a few people within the company are aware of. It is important to make it clear in agreements that anyone who is aware of trade secrets will not take the information with them if they leave or change job, regardless of whether they have access to the trade secrets in verbal or written form.
In some cases, retaining information or knowledge as a trade secret could be an alternative to applying for a patent. Patents will certainly give exclusive rights to your invention for 20 years, but a patent means that the invention will also be published. As a trade secret, the information/knowledge can remain within the company, but you risk someone else coming up with the same or very similar solution, as you do not have exclusive rights to it. Examples of well-kept trade secrets are the formula for coca-cola and the essence that is needed to produce the soft drink ‘julmist’.
In accordance with the “Act on protection for trade secrets”, trade secrets are defined as “information concerning commercial or operating circumstances in an entrepreneur’s business which the entrepreneur keeps secret and whose disclosure would be likely to cause him harm with respect to his competitors”. The protection is structured so that anyone who gains access to or reveals a trade secret without authorisation can be prohibited from disclosing or utilising it subject to a penalty, or alternatively through being ordered to pay a fine or being sentenced to imprisonment.
Test your business
In the test, we will help you identify your intangible assets: