Trade secrets are a loose cannon in the world of intellectual property. The category is so broad, it can be hard to define. Basically, a trade secret is any information your business has that derives at least some of its value from its confidentiality. The recipe for Coca-Cola Classic, for example, is an unimaginably valuable trade secret. The company that owns it is one of the world’s most valuable brands, and has never patented the formula for fear of being copied. Better, it thinks, to keep the formula in a vault and away from prying eyes.
That’s just one way to keep a trade secret . Since trade secrets lose some or all of their value if the wrong person learns about them, there are many other ways to keep your profitable intangible assets to yourself:
Don’t tell anyone. The best way to keep something secret is to keep it to yourself. Say you run a muckraking newspaper that’s popular because it gets lots of inside information from sources. Other publishers wonder how you do it. In fact, you just subscribe to government agencies’ newsletters and look for retirement announcements and then you invite the freshly retired agents to lunch and listen to their office gossip for leads. That method obviously can’t be patented, but it’s the secret of your success as a journalist. Never telling a soul how you broke a big corruption scandal ensures nobody ever uses your methods to compete with you.
Demand nondisclosure agreements. Imagine you run a taxi company and discover you can get 10 percent more mileage by pouring a little cooking oil in your cabs’ gas tanks. You have to tell your drivers to do that because you can’t realistically do it yourself. Before you do, consider making your employees sign a nondisclosure agreement. If they tell your competitors how you’re economizing on gas, you may have grounds to sue.
Use encryption. Suppose you’re a computer engineer who’s developed a revolutionary new operating system that has a million lines of code. Clearly, you can’t remember it all yourself, but you definitely need to protect it until it launches. Try using PGP (or other protocols) to encrypt your precious data so only you and your team can see it.
Trade secrets are important enough to protect with all your might. Fortunately, there are many ways to keep your secrets secret, and profitable.