It is also known as “confidential information” or “classified information”.
To be safeguarded under trade secrets, the matter should be ‘secret’. Though the definition of trade secret is variable as per the jurisdiction but there are following elements that are found to be same –
(i) Is not known by the public.
(ii) Provides some financial sort of gain to its holder.
(iii) Involves reasonable efforts from the holder side for maintaining secrecy.
(iv) Importance of data or information to him or for his rivals.
(v) The ease by which information could be learned or duplicated by others.
Any enterprise or an organization can safeguard its confidential data or information by entering into non disclosure agreement with its employees.
Such law of protecting confidential matters offers monopoly in respect of any secret data and information. Trade secrets offer protection for an indefinite time period. Unlike patent it does not expire.
Every company invests its time and resources into discovering information regarding refinement of its various activities and operations. If other company will be allowed to use the same knowledge then the chance of first company survival and dominance into the industrial arena would be vitiated.
When trade secrets are recognized then the inventor of such knowledge is entitled to consider that as part of the intellectual property.
Unlike of patent, .copyright, there is no particular international treaty(s) for trade secrets. Moreover there is no global law for standardizing definition of trade secrets. Trade secrets are gaining recognition year by year in throughout the world.
It has been said that the major technologies in the world are protected under the head of trade secret instead of patent. The ‘North American Free Trade Agreement’ (NAFTA) and the agreement on Trade Related Aspects of Intellectual Property’ (TRIPs) ratified during the Uruguay round of the ‘General Agreement on Tariffs and Trade’ (GATT) have their specific provisions which point towards increase in the protection granted to trade secrets.
Furthermore there has been a rising trend particularly in Asian nations of using the domestic statues which direct towards trade secrets protection.