Trade Secrets and Non-Disclosure Clauses, Agreements or Compulsion

Last modified by Administrator on 2023/02/17 01:53

The legal concept of "trade secret" refers to any information of value to a business that:
(a) is not publicly available or otherwise generally known within the relevant industry or trade; and
(b) is treated as secret or confidential at all times by its owner, who has taken steps to protect it.

Trade secrets involve information or know-how of any type that a commercial entity prefers to not reveal beyond selected people or organizations. To be legally enforceable, the secret information must be generally unknown or non-obvious, it must have commercial value due it's being kept secret, and furthermore, the holder of the secret must take reasonable steps to ensure that those provided the information know that they are obliged to keep it secret.

Trade secrets are legally protected through confidentiality agreements in contracts without government registration, and they can stand for an unlimited period of time.

Many organizations consider trade secrets to be more effective for out-innovating their competition, allocating funds and effort into R&D that would otherwise get diverted into government registration and litigation around artificial monopolies, which must be documented to gain legal force. This topic is addressed in detail in the FLOW Syllabus.

A third party who obtains confidential information illegally or in confidence may be prevented from using or disclosing the trade secret, and may have to compensate the owner of the confidential information for using it without permission.

In each country, the allocation of national vs. state/provincial/departmenal jurisdiction over Copyright Law, Patent Law and Trade Secrets Law is handled differently.

For example, in Canada: "Paradoxically, the protection conferred by law on trade secret holders appears to be a complex matter in Quebec as well as in Canada. Not only do the governing rules tend to be difficult to define, but the ambit of the protection conferred by such rules and the likelihood of success of the remedies available remains unclear and unpredictable."_ ("The Law of Trade Secrets in Quebec and in Canada - A Pragmatic Approach" http://www.fasken.com/files/Publication/b0248faa-dbad-44d0-b7d5-2ccb1574d5bb/Presentation/PublicationAttachment/4ea8c215-b6b7-48df-b3f7-39a19bcc9484/The_law_of_trade_secrets_in_quebec_and_in_canada.pdf )

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