There are limitations to the use of secrecy
Trade secrets are usually formulas, patterns, compilations, devices, processes, codes, data that are specific to its owner, providing a business advantage over a competitor and are kept secret or confidential. Most small and medium-sized enterprises (SMEs) possess trade secrets that are worth considering. For example, lists of preferred clients or client profiles might be considered trade secrets.
Trade secrets may, in certain cases, be protected contractually by the application of certain legal concepts and statutes. One advantage of protecting intellectual property (IP) under trade secrets is the fact that there is no definite time limit for how long the property may be protected.
Failure to make appropriate efforts to maintain the secrecy of trade secrets will deprive the owner of the right to legal protection for the trade secret. Even if you can maintain the invention secret, for example, for a potentially patentable invention, if someone else independently makes the invention, that person may be able to obtain a patent and prevent you from exploiting the invention.
Risk of involuntary disclosure
Trade secrets are not without disadvantages. Others who discover a trade secret through their own research, by reverse engineering or because of an involuntary disclosure, are entitled to use it.
A great need to treat information as protected assets
Unless a SME protects its trade secret information with appropriate safeguards, the legal system will not protect that information from misuse. It is good practice that SMEs advise their employees, customers, vendors and visitors that disclosure or other misuse of its trade secrets is forbidden.
The need to control and limit the unnecessary sharing of information
While employed, and also for a period after leaving the employment, an employee cannot misuse confidential information acquired during that employment. For any company, and especially for SMEs, it is important to control the confidential information by keeping it in a safe place under restricted access only to those employees who need access to the information in order to perform their functions.
Make use of appropriate procedures (i.e. non-disclosure agreements)
Appropriate procedures to keep confidential information secret may include employment agreements with non-disclosure provisions, keeping confidential information under lock and key and providing trade secret information only to individuals who agree to sign non-disclosure agreements. Many examples can be found of typical agreements whereby parties agree not to disclose the confidential information they share and not to make unauthorized use of such information. Sometimes these agreements are also known as confidentiality agreements.