The know-how means a package of non-patented practical information (of a technical, commercial, administrative, financial or other nature), resulting from experience and testing, which is secret, substantial and identifiable and it can be protected by trade secret.
The trade secret is a type of intellectual property (IP) that refers to information that is secret, meaning that is only known by a limited group of persons, that is has commercial value because is secret, and, it has been 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 trade secret is a good instrument for any confidential business information that provides an enterprise a competitive advantage unknown to others. Secret information could include both, technical and commercial information, such as manufacturing processes, tests data, lists of suppliers and clients. A trade secret may be also made up of a combination of elements, being individually of public domain, keeping its combination secret.
Unlike the protection mechanisms provided by patents, utility models, industrial designs, trademarks and copyrights, described in the article ‘IP protection mechanisms’, trade secrets do not provide ‘defensive protection’, meaning that, the trade secret owner cannot stop others from using the same technical or commercial information, if they acquired or developed it through their own R&D, reverse engineering or marketing analysis. The trade secret protections then provides the owner the right to prevent the information lawfully within their control from being disclosed, acquired or used by others without their consent and, as other intellectual property protection mechanisms, trade secrets are property rights and can be assigned or licensed to other persons or entities. To be granted with trade secret, no registration is required and it can be protected for an unlimited period of time, unless it is discovered or legally acquired by others and disclosed to the public. Unfair practices regarding secret information include industrial or commercial espionage, breach of contract, breach of confidence and inducement to breach.
The trade secret could be an instrument to protect an IP although it meets the patentability criteria. Increasingly, companies are turning to use the trade secret rather than the patent, as it offers greater flexibility at lower costs. This fact could be turned into a disadvantage when authorizing a third party to access and use the trade secret information through a license or assignment. A trade secret is more difficult to enforce than a patent and its often difficult to prove its violation. Furthermore, the level of protection granted varies from country to country, being considered ‘weak’ in some.
To be considered ‘secret information’ some security measures need to be implemented. Examples of actions to perform could be: implementing an information encryption system such as computer passwords and firewalls; limiting access to the information only to the necessary people, signing non-disclosure agreements with employees, suppliers, and partners, training employees on trade secret policies and practical measures.