Trade Secrets

What is a trade secret?

Trade secrets are intellectual property (IP) rights on confidential information which may be sold or licensed.

What qualifies as a trade secret?

In general, to qualify as a trade secret, the information must be:

  • commercially valuable because it is secret,
  • be known only to a limited group of persons, and
  • be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.

The unauthorized acquisition, use or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.

In general, any confidential business information which provides an enterprise a competitive edge and is unknown to others may be protected as a trade secret.

Trade secrets encompass both technical information, such as information concerning manufacturing processes, pharmaceutical test data, designs and drawings of computer programs, and commercial information, such as distribution methods, list of suppliers and clients, and advertising strategies.

A trade secret may be also made up of a combination of elements, each of which by itself is in the public domain, but where the combination, which is kept secret, provides a competitive advantage.

Other examples of information that may be protected by trade secrets include financial information, formulas and recipes and source codes.

Depending on the legal system, the legal protection of business secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information.

While a final determination of whether trade secret protection is violated or not depends on the circumstances of each individual case, in general, unfair practices in respect of secret information include industrial or commercial espionage, breach of contract and breach of confidence.

A trade secret owner, however, cannot stop others from using the same technical or commercial information, if they acquired or developed such information independently by themselves through their own R&D, reverse engineering or marketing analysis, etc. Since trade secrets are not made public, unlike patents, they do not provide “defensive” protection, as being prior art. For example, if a specific process of producing Compound X has been protected by a trade secret, someone else can obtain a patent or a utility model on the same invention, if the inventor arrived at that invention independently.

Companies should take preventive measures to protect trade secrets against theft or misappropriation, including:

  • Non-disclosure agreement (NDA): employees and business partners should sign a non-disclosure agreement that prevent them from disclosing a company’s confidential information.
  • Non-compete agreement (NCA): employers should ask employees, contractors and consultants to sign a non-compete agreement to prevent them from entering in competition when their employment/service agreement ends.
  • Robust IT security infrastructure
  • Controlling the accessibility of important documents

Explore more information on trade secrets’ protection.

Read the full list of trade secrets FAQs.

video explaining what a trade secret is

Video: What is a trade secret?

WIPO Symposia on Trade Secrets and Innovation

The WIPO Symposia on Trade Secrets and Innovation provide fora for exchanging ideas and perspectives on issues relating to the interface between trade secrets and innovation.  They address new challenges and opportunities for both technological and service innovation sectors, as well as potential impacts of emerging technologies on the integration of trade secrets in the modern innovation ecosystem.

The Symposia bring together panelists from across the globe to share their insights in the aspects related to policy, law, economics and businesses.

The next WIPO Symposium on Trade Secrets and Innovation is due to take place in May and will discuss how trade secret systems support innovation and knowledge sharing in a fast-paced innovation ecosystem.

Find out more

Past event

Real world examples of trade secrets

Trade secrets are a key component of IP portfolios helping businesses protect their secret formulas, know-how and other key information that gives them a competitive edge. Read our real-world trade secret cases for examples of how companies have used trade secrets to protect their intellectual property.

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Laws and treaties

International treaties

The Paris Convention for the Protection of Industrial Property (Paris Convention) administered by WIPO deals partly with the protection of trade secrets as does the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).

IP laws and treaties (WIPO Lex)

The WIPO Lex database is a comprehensive search tool that allows you to search national laws and international treaties on intellectual property.

Related links

Information resources