Trade secrets are a type of confidential information and intellectual property right. There is no precise definition of what amount to trade secrets.
That being said, trade secrets are the knowledge of a business or the employer’s activities or affairs that a person or employee acquires in the ordinary course of trade when working with the business or for the employer.
Trade secrets have been usefully described as:
… information which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret … It must be information used in a trade or business and the owner must limit the dissemination of it or at least not encourage or permit widespread publication.
A business or employer can protect its legitimate interests in:
Types of trade secrets include client lists and the goods they buy, pricing and information about the businesses processes and dealings. Secret formulae, development of new products and processes and plans for financial expansion also can be protected as trade secrets even if they are untried or untested concepts. Information does not need to be of a technical nature to qualify.
A warning though that simply because a business elects to describe information as a trade secret or considers it so, doesn’t mean that a court will treat it as a trade secret.
They generally do not include the special skills and knowledge that an employee obtains by working there.
An employer can’t generally protect itself from a former employee using the special skills the employee develops while being employed but does have property in its connections with employees.
That means that unless there is a contractual right to do so (such as an effective restraint of trade provision in an employment contract), an employer can’t stop an ex-employee from using the personal skill and knowledge the employee learns, while being employed with that employer, even when used in competition with the employer.
The courts have held that the owner and creator of a trade secret should be entitled to stop the use of disclosure of that information until it is in the public domain without getting there by a breach of confidence.
Trade secrets are seen as so important and valuable to merit special treatment. The distinction between trade secrets and mere confidential information can be an important consideration when dealing with employees and in particular, post-employment contract restraints.
The point is that to protect confidential information that does not amount to trade secrets, a contractual provision would be required in the employment contract. That is different from trade secrets, because they are protected anyway, whether there is a provision in the employment contract or not. The safest way to deal with employees is to include provisions that cover all types of confidential information.
Aitken Whyte Lawyers can assist you in clarifying the terms of employment by drafting appropriate employment or other contractual documents. We will write your agreements or employment contracts so that the terms between the parties are clearly set out and to minimise the risk of there being a dispute about what they mean.
If you are already in a dispute, a threat is apparent to your rights, need to know what your rights are or urgently need to protect valuable intellectual property rights, Aitken Whyte Lawyers will provide you with commercial and practical advice and aggressive but fair representation to protect and pursue your valuable rights and interests. We are focused on results, have significant experience in fighting litigation in all courts and offer services second to none.