Definition:
A trade secret is a formula, pattern, practice, process, design, instrument, or compilation of information used in one's business and which is not generally known or reasonably ascertainable to the public and which provides the owner of the information with a competitive advantage in the marketplace. Trade secrets often protect valuable information that cannot be sheltered under other forms of intellectual property law.
Under most statutory definitions, to establish the existence of a trade secret, one must show that the information alleged to be a trade secret is:
- of an appropriate subject matter to be protected as a trade secret;
- not a matter of common knowledge in the trade and not readily ascertainable by proper means;
- of value; and
- the object of reasonable precautions taken under the circumstances to maintain secrecy.
Trade secrets can take many forms. Examples of trade secrets include a:
- formula or chemical compound;
- process of manufacturing, treating or preserving materials;
- pattern for a machine or other device;
- survey method used by professional pollsters;
- software application;
- recipe;
- customer list;
- new invention for which a patent application has not yet been filed;
- marketing strategy;
- research result;
- computer algorithm;
- blueprint.
Also Known As:
Confidential Information, Classified Information
Examples:
- Colonel Sanders’ recipe for fried chicken
- Microsoft's computer algorithms
- Coca-Cola’s soft drink formula
