Trade Secret Protection
A trade secret is a formula, program, business system, method or other information that provides value to its owner because it: is not generally known; and is the subject of efforts to keep it secret. Thus, the key element of a trade secret is its secrecy.
Essentially, a trade secret is special secret information a business uses to gain a competitive advantage. Examples of trade secrets include special manufacturing methods, such as the formula for Coca Cola®, as well as, customer lists and marketing and business systems.
Trade secrets should be disclosed only to those with a "need to know" who contractually are bound to keep it secret. Information disclosed to parties without a legal requirement of secrecy, cannot qualify as a trade secret. In addition, the trade secret should also be kept in a locked file cabinet or password protected computer system.
The most basic method for profiting from a trade secret is to use it in a business. The trade secret can generate higher margin and market advantage. Like other forms of intellectual property, a trade secret can also be licensed. For example, a customer list can be licensed to a list broker. By licensing, the owner permits another to use the trade secret in exchange for compensation.
Usually, though, the most profitable trade secret is a business method or system that allows your business to provide consistent products or services (or both) to its customers.
Trade secrets can be stolen. If that happens, the owner can bring a suit and request the court to enter an injunction requiring the other party to cease using the trade secret and refrain from disclosing it to others.