Confidential information refers to information that is not in the public domain, including business information and anything else you regard as confidential. Trade secrets are considered under 'confidential information', and can include all types of technical information. Information does not need to be written down to be confidential.
Confidential information is valuable while it is kept secret - to avoid competitors gaining valuable insights into your new products or services that might give them an advantage. For example, the formula for Coca-Cola has been kept secret for over 50 years, ensuring a long commercial life for Coca-Cola. If the recipe were disclosed, competitors could replicate the product, which would diminish Coca-Cola's market share and brand value.
Trade secrets are sometimes used as an alternative to applying for a patent for an invention. However, if you decide to protect the invention as a trade secret, there is no legal protection against a competitor buying a product made using the invention and then 'reverse engineering' it to discover the trade secret. They could then exploit the invention and sell it under their own brand.
One way to protect trade secrets is to have a written document, such as an employment contract or confidentiality agreement, that states that employees cannot disclose your trade secrets to others.
- Last reviewed: 26 Sep 2020
- Last updated: 1 Jul 2016