Also known as confidential or classified information, a trade secret is any kind of knowledge, whether it is a formula, design, pattern, mix, process, practice, etc., that is not generally known to the public and enables a business to have a competitive advantage over another business or over customers. This definition of a trade secret requires 3 conditions for something to be called a trade secret: it is not public knowledge; thus provides an economic or competitive advantage; and its secrecy is maintained at all costs.
Unlike patents and trademarks, a trade secret is not protected by the intellectual property laws. However, selling or disclosing of a trade secret is considered to be an unfair practice. Businesses provide non-disclosure or non-compete agreements to employees in order to protect their trade secrets. Employees, in the course of doing their job, may have access to information pertaining to their company’s trade secret or to the trade secret itself. Thus, non-disclosure or non-compete agreements are necessary to keep trade secrets confidential.
However, a trade secret is not necessarily absolutely confidential. Trade secrets are only protected from improper means of obtaining it, such as espionage and surveillance. Liability for violating a trade secret is dependent only on the means by which one has obtained it.
If a trade secret is violated, the owner of such a secret may pursue 2 legal actions depending on how grave the violation is. An owner may seek an injunction in order to stop the spread of such a trade secret so as to return it to the owner’s exclusive use. A second option may be for the owner to seek money damages when the trade secret can no longer be controlled and has resulted in the owner’s losses.