Secret spells and hidden brews, tricks of the trade make treats anew. Who would have thought IP (intellectual property) could be so magical?

One type of IP is more unknown and mysterious than all the others. Its hiddenness makes it special and used in the right way can be just as powerful. It’s called a trade secret and is a type of IP protection that can be pure business alchemy.

 

What is a trade secret?

 

In a nutshell, a trade secret is confidential business information that has value. Or, to put it another way, anything secret you’ve created that you wouldn’t want to lose to a competitor! It could be something like a hidden process, recipe or even an algorithm that powers the performance of a programme. This is also known as proprietary information.

Trade secrets are different from patents in many ways, although both need to be kept confidential (for patents until the patent application is eventually filed).

 

Nearly every businesses will have some kind of commercially sensitive information, so being aware of that and understanding its value can be an important first step to protecting it. A trade secret is the thing that could really provide you with a competitive edge.

In the UK, trade secrets come under two types of law; the common law of confidentiality and information that by definition falls under the Trade Secrets (Enforcement, etc.) Regulations 2018.

Common law confidentiality arises when ‘information with the necessary quality of confidence is imparted in a situation imposing an obligation of confidence’.

You can see them both as mutually complementary with some overlap. Both aspects carry a strength, just like a two-headed hydra. Think of a witch’s brew, filled with spooky secrets and bubbling with powerful potential.

 

What are some famous trade secrets?

 

There are so many trade secrets concealed around the world, but some are more famous than others.

Does anyone really know the secret formula for Coca-Cola? Apparently not (although it hasn’t stopped other brands from trying to work it out). In the company’s own words, ‘the formula for making Coca-Cola is a trade secret. We have protected the special taste of Coca-Cola for more than 130 years. Only the Coca-Cola Company knows how to make Coca-Cola’.

The mystique behind the Coca-Cola formula is so famous, that the company has it locked away inside a vault on display in the Coca-Cola museum, Atlanta, USA.

 

 

Trade secrets are actually quite common in the food and drinks industry. Think of all those secret recipes handed down over generations. There is hidden knowledge to making the perfect chocolate brownie, malt whiskey or even a colonel’s secret fried chicken recipe made from 11 herbs and spices. KFC’s original secret recipe is what they claim makes their chicken so ‘finger lickin' good’. For both of these brands, it is magical marketing in its messaging too.

However, what if your trade secret isn’t cooking, but computing? Yes, there are plenty of secrets in technology too, especially software. Search engines such as Google (parent company Alphabet) have built an entire business model on algorithms that effectively rank information for ease of finding.

The algorithm has been developed and refined over many years of testing and trading. Recent news of a leak of an AI related trade secret have sent the company into a tailspin resulting in a criminal case been filed. Part of a secret was out.

Any leak of a highly guarded secret can bring major consequences for any company and so protecting these secrets becomes paramount. Once the witch’s secret cat is out of the bag, it’s out. Therefore, businesses will do everything to protect their secrets with the legal equivalent of an ancient curse.

Woe will to any soul who breaks the secret seal on any trade secret! The curse will come through prosecution.

How to protect your trade secret

Which raises a pressing question, how does a company or individual protect themselves from having their secrets stolen?

The answer will depend on the circumstances, and professional legal help is always advisable. Generally the secret is best protected in-house by firstly limiting exposure to a set number of individual(s) on a need to know basis only. Therefore, every company should have a confidentiality process in place backed up in employment contracts.

 

Physical and electronic security is an absolute must, depending on how the secret is kept.

Furthermore, before any sharing of a secret to a third party it is highly advisable to protect it with a non-disclosure agreement.

Trade secrets are unregistered intellectual property rights. This simply means there is no register of them or requirement for application. This is unlike patents, designs and trade marks. Controlling access to the secret is through contracts based on the law of confidentiality and specific regulations covering trade secrets.

This in some circumstances can be an advantage over patents. A patent, although initially secret will eventually be published before it can be granted to the inventor. The quid pro quo is then a monopoly on the technology or technique for twenty years. If you want to look at alternative ways to protect your process, then exploring trade secrets as a viable alternative could be the way to go.

If you’d like to find out more about the magic combination of all the different types of IP, then our Introduction to Intellectual Property workshops and webinars will do the trick.

Spook your competition and keep your trade secrets close

Your trade secret is truly a magical thing that spooks your competition. It has all the mystique you need to creates an aura of mystery in your business and spellbind your customers. They will want to keep coming back for more, hooked on the power of your hidden magic.

So this Halloween, do not be scared to find and use your business’s secret spell. The treat is always in a secret trick.