Question: What is a trade secret?Answer:
A trade secret refers to a device, method, process, knowledge or technology used by a company, which it intends to keep confidential. An unregistered patent is generally known as a trade secret. There are advantages of keeping trade secrets unpatented, as they have general protection under the common law against unfair competition and since they are unregistered they don’t expire. It also means that you don’t need to disclose details relating to the trade secret, as you would do in the patent registration process.
However there are disadvantages to treating your IP as a trade secret. The main disadvantage is that it does not provide any legal security against an independent competitor inventing a similar or identical method or device. You can add further protection over your trade secret by making employees sign confidentiality or nondisclosure agreements. However, proving that an employee has breached their confidentiality agreement is usually much harder and more costly than defending registered rights under a patent. In addition to a basic confidentiality agreement, a non-compete form prevents employees from using the trade secret elsewhere once they leave their position. It is easier to prove that someone is unlawfully competing with your business than proving there was a breach of confidentiality.