Trade secrets

In certain cases, a business will rely on knowledge that may not - or is suitable for - being patented. It is then important for the company to keep this knowledge secret, so that it cannot be exploited by competitors. If this knowledge can be considered a trade secret, it can obtain protection. This protection can be used as a tool to protect intellectual property rights, and can be an alternative or supplement to other registrable rights.

What are trade secrets?

Briefly explained, trade secrets can be described as information, knowledge or information that should not end up in the hands of competitors or others. This information gives the company a competitive advantage, and it can be harmful to the company if it is exploited by third parties.

For information to be considered a trade secret, it must be:

  • secret
  • have commercial value, because it is secret
  • attempted to be kept secret by the company by reasonable measures

When is information confidential?

The fact that the information must be secret means that it must neither be generally known nor easily accessible. One must, among other things, assess how many people have access to the information and how easily outsiders can get hold of it. Information that is individually known, but which is put together to form information that is not easily accessible to others, can be a trade secret. A typical example of this is a recipe. Most often, the ingredients in a recipe are known, but the composition is unknown.

When does the information have commercial value?

This term includes both actual and potential value. Actual value means that it can damage, among other things, the holder's business interests and competitiveness if someone unlawfully obtains this information. Potential value also includes information that in the future can create income or value for the holder.

What is meant by reasonable measures?

The information must have been tried to be kept secret by reasonable measures. These must always be assessed concretely in the individual situation. There will probably be stricter requirements for what are considered reasonable measures in a large medical firm than in grandma's bakery. At a minimum, the holder must assess the various risk factors.

Sufficient measures will typically be the introduction of physical or technical barriers for employees or other third parties, such as access cards, login information or firewalls. In addition, general awareness raising and internal guidelines for the processing of sensitive information may be necessary.

If there is no question of an employment relationship, relevant measures may be to enter into agreements on secrecy - so-called confidentiality agreements (Non-disclosure agreements, NDA). Visible labeling of information can also be considered sufficient measures. However, a confidentiality stamp on a document will not automatically mean that the information in the document becomes a trade secret.

How do you enforce trade secrets?

If someone has wrongfully exploited a trade secret, the owner can take the case to court. There, the owner can demand more sanctions and measures. There, the holder can demand several sanctions and measures, for example remuneration, compensation, temporary injunction, punishment, prohibition of existing and future interventions and measures to rectify the consequences of ongoing and future interventions.

Third parties who have exploited trade secrets in good faith are taken care of in various ways. For example, they may have the right to continue to use the information.

What are not trade secrets?

It is necessary to draw a line between what we consider trade secrets and what is not. We can say that there are four categories of information that are not considered trade secrets:

  1. Immaterial information
  2. Experiences and skills that employees acquire through an employment relationship
  3. Commonly known information or information that outsiders can easily acquire
  4. Private information

How can you protect and manage your own trade secrets?

We suggest five points you should think about:

  1. Identify. There's no point in watertight contracts if you don't know what they're supposed to protect. Start by finding out what kind of information the company has access to, and assess whether this can be defined as trade secrets.
  2. Classify. Is this information worth keeping secret? And if so, to what extent?

  3. Consider measures . Which measures are suitable and sufficient to protect the various information?

  4. Raise awareness and implement measures . Ensure that both internal and external parties are made aware of how to handle trade secrets. The law requires that measures are taken, and not just written down.

  5. Strategy. Take advantage of the values. Trade secrets are not exploited by being dusted in a safe - like all other intellectual property rights.

Do you want to know more?

If you have general questions about trade secrets, you can contact our customer center on 22 38 73 00.