What is a trade secret?

A trade secret refers to information that is not generally known or easily ascertainable, which provides a competitive advantage to a business. This can include formulas, practices, processes, designs, instruments, or a compilation of information that is valuable to the company because it gives them an edge over competitors who do not have access to this information. The secrecy of the information is key; if it becomes public knowledge, it is no longer protected as a trade secret.

This concept emphasizes the importance of confidentiality and the economic value derived from keeping such information secret. Unlike patents or trademarks, trade secrets do not require registration with a government entity, but they must be actively protected and maintained through reasonable measures by the company. This makes them a unique form of intellectual property.

In contrast, information that is public knowledge does not qualify as a trade secret since it is available for anyone and thus does not provide the competitive advantage that confidentiality offers. Similarly, a mark indicating product quality relates to trademarks, and a term commonly associated with a product pertains to branding, neither of which aligns with the definition of trade secrets.