Key in the Lock

Trade Secrets

 

What are Trade Secrets?

Trade secrets, also referred to as know-how and other confidential or proprietary information play an important role, particularly in Business.

Trade secrets are typically broadly defined and may include:

  • sales methods;

  • distribution systems;

  • customer databases;

  • advertising strategies;

  • supplier list;

  • manufacturing processes; 

  • etc


An example of a trade secret is the combination of herbs and spices used in Kentucky Fried Chicken.

 

Confidential Information

Information plays an important role across many areas of society and from a Business perspective can be a valuable asset.

Depending on the situation, it might be necessary to keep certain information out of the public domain by maintaining a level of secrecy. For example, the information might relate to:


  • New products or services yet to be introduced to the market;

  • Technical know-how;

  • Databases;

  • Financial details about an organisation;

  • Etc.

Business owners seeking to protect their trade secrets when dealing with third parties may enter into a Confidentiality or Non-Disclosure Agreement.

Where a third party (“Receiving Party”) breaches their confidentiality obligations, various remedies maybe available to the affected party (“Disclosing Party”), such as:

  • Breach of contract:

    • the remedies for a breach of the Confidentiality Agreement may be set out in the agreement itself, which could include a right of termination of some other ancillary agreement;

    • damages - a monetary order by the Court to compensate for losses incurred);

    • injunction - being an order of the Court that a third party cease using the confidential information or take some other action;

  • An action in common law referred to as “Breach of Confidence”.

In order for the Disclosing Party to avail themselves of the remedies, certain criteria must be met. For example, in a breach of confidence action there are typically a number of elements that the Courts have said need to be satisfied:

  • the information must have the necessary quality of confidence;

  • the confidential information was improperly disclosed;

  • there was a breach of the obligation of confidence;

  • damage was suffered by the Disclosing Party by the Receiving Party as a result of the breach of confidence.


The circumstances in each case will determine if a breach has occurred and the remedy available.

 

What We Do

At Greyson Legal | IP we help our clients to protect their trade secrets. We can do this by providing:

  • Non Disclosure Deeds

  • Confidentiality Agreements

  • Employment Agreements - ensuirng they have appropriate clauses that protect your intellectual property in the hands of your employees

  • Consultant and Contractors Agreements - helping you protect your trade secrets when dealing with consultants and contractors

As know-how is important to a Business, it follows that appropriate mechanisms should be adopted by Business owners to protect their trade secrets.