A trade secret is a formula, practice, process, design, instrument, pattern, or a collection of information which is not generally known, invented or created, by which a business can obtain an economic advantage over competitors or customers. In some jurisdictions, such secrets are referred to as "confidential information" or "classified information".
With its broad definition of eligible subject matter, trade secret law protects a wide range of valuable information, including information that would not be eligible for protection under existing patent, trademark, or copyright law. This could include formulae and recipes, proprietary databases, business processes and methods, information about costs, pricing, margins, overhead, manufacturing processes, proprietary computer software programs, customer lists, and strategic plans and marketing programs.
There are three factors that are common to all definitions of a trade secret, a trade secret is information that:
- Is not generally known to the public;
- Grants some sort of economic benefit on its holder (where this benefit must derive specifically from its not being generally known, not just from the value of the information itself);
- Is the subject of reasonable efforts to maintain its secrecy.
The unauthorized acquisition, use, or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.
- "Why are Trade Secrets Becoming More Important?". Lampert Law Firm. Retrieved 2021-01-27.