Trade Secrets and Confidentiality
Intellectual property protection is crucial for all businesses. After all, your intellectual property is the most important asset of your business. Trade secrets are an important part of your intellectual property portfolio.
What is a Trade Secret?
A trade secret is any form of valuable proprietary information that derives its value from secrecy. It is the idea or information that is not known by the public or its comparative industries. Its exclusivity and secrecy is held by the business and the business owner. For example, the Big Mac sauce recipe would be considered a trade secret because the recipe itself is a secret and is exclusive to McDonalds. It is kept confidential to ensure that no other fast food restaurant can replicate it. This is because the Big Mac and its complimentary sauce is an asset to the McDonalds corporation and establishes economic value to the business.
How do you Protect Trade Secrets?
1. Non-Disclosure Agreement
You have an idea for your business. Maybe it is a recipe for a new food item or a patent for a new mobile app. Whatever it may be, you will want to protect it from becoming public information. For this reason, it is important for third-parties to sign a non-disclosure agreement (NDA). An NDA is an agreement used to formally bind all parties to keep any or all information that is discussed during commercial transactions confidential. Entering a written NDA is a crucial step in protecting your business assets and your trade secrets.
2. Confidentiality in Employment Agreements
Most businesses will have employees. As employees may sometimes only be temporary, it is important to ensure that they don't take your information and run. This is why it is important to include confidentiality clauses in employment agreements.
3. Confidentiality in all Contracts
It takes a village to build a business, which means that your business will be engaging with a myriad of different services providers, such as contractors, suppliers, manufacturers, etc. Ensure that you enter into a written agreement with each of these players and ensure that intellectual property and confidentiality provisions are included in these agreements.
Believe it or not, in Canada there is actually no governing legislation that protects trade secrets. This is why it is crucial for a business with trade secrets to take the proper measures in keeping confidential information, well, confidential. Establishing policies and procedures to protect the confidentiality of the information, as well as creating contractual obligations on 3rd parties to protect that confidential information is critical.
How long does trade secret protection last?
As long as the information stays a secret, the protection can last indefinitely.