Trade secrets are an important component of intellectual property protection in modern business. It covers any confidential information that has economic value for the company due to its secrecy. This information may include technological developments, business plans, marketing strategies, customer lists, financial indicators and other data that provide a competitive advantage. Proper protection of trade secrets helps to preserve the uniqueness of products and services, preventing unauthorized use and disclosure of important information. Protection helps companies maintain their competitiveness and innovative potential in the market.
As a general rule, an employer is free to determine the range of information (scope of information) that constitutes a trade secret.
Thus, a trade secret is defined as information that:
– is secret in the sense that the information is unknown and not readily available to persons who normally deal with the type of information to which it belongs;
– has commercial value;
– has been the subject of measures to keep it secret taken by a person who legally controls this information.
Thus, it can be any information about the company’s structural organization, financial performance, suppliers, customers, contract terms, business plans, etc.
Trade secrets are intellectual property
According to the law, a trade secret is an object of intellectual property – intellectual property rights to a trade secret belong to the person who has lawfully designated the information as a trade secret, unless otherwise provided by an agreement.
Accordingly, in order to avoid negative consequences that may be associated with information leakage, it is important to clearly establish the trade secret regime, which may include the following minimum measures:
- Inclusion of provisions on trade secret protection in employment agreements (contracts), job descriptions, and agreements with counterparties
- Signing an agreement with employees on non-disclosure of information (NDA), which, in particular, will contain a reservation regarding the validity of the relevant provisions during the existence of the employment relationship and for a certain period of time after its termination
- Defining a clear list of information that constitutes a trade secret
- Approval of local policies/procedures on trade secrets that will reflect the procedure for the use and dissemination of such information, as well as the responsibility of employees for the unlawful dissemination of trade secrets
- Providing work computers to employees who work remotely or requiring them to work on cloud services without saving such information on a personal computer, for example, using Google Disk. Installing software that prevents the operation of malicious programs.
- Establishing the obligation to restrict access to the work computer by third parties, in particular by setting a password or other access code, prohibiting the use of home printers to print work materials.
At the same time, the court practice shows that the mere existence of the Regulation on Protection of Trade Secrets or the List of Information that is a Trade Secret is not sufficient to protect trade secrets. In particular, in the court case No. 372/4550/19, the employee allegedly disclosed trade secrets, but during the dispute resolution, the employer was still unable to provide any evidence that the employee had familiarized himself (under his personal signature) with the relevant documents governing the trade secret regime in the company.
Accordingly, it is important to introduce a holistic model of trade secret protection that will protect the company from information leakage.
Property rights of intellectual property
Intellectual property rights to trade secrets are as follows:
– the right to use a trade secret;
– the exclusive right to authorize the use of a trade secret;
– the exclusive right to prevent unlawful disclosure, collection or use of trade secrets;
– other intellectual property rights established by law.
Civil liability in the form of damages
As a general rule, damages are difficult to prove in court, and the specifics of trade secrets only complicate this task. The position of the Supreme Court is well established, according to which this type of liability is possible in the presence of four conditions of an offense, namely a civil offense
1) unlawful behavior of a person (debtor)
2) damages caused by such person
3) a causal link between the unlawful behavior of the person and the losses;
4) the fault of the person who caused the damage, including the measures taken by the creditor to obtain such benefit. In the absence of one of the elements of a civil offense, liability in the form of damages does not arise.
Thus, the methods of protecting trade secrets should be determined and implemented solely at the discretion of the business owner. In turn, the exclusive implementation of trade secret protection measures, in the event of a legal dispute, may be deemed insufficient to bring the infringer to justice.
Protection of trade secrets is a key aspect of ensuring competitiveness and sustainable business development. Effective protection of confidential information allows companies not only to avoid losses due to the leakage of valuable data, but also to preserve their innovative potential and unique market advantages. In today’s environment of global competition and rapid technological development, proper protection of intellectual property is a prerequisite for the success of any organization. This allows companies to develop confidently, implement new solutions and ensure a long-term growth strategy. Our team knows how to protect your business, so don’t hesitate to contact us and rest easy.
confidential information / copyright / intellectual property / trade secrets
