Question

(a) Define ‘trade secret’. (b) What must you do to protect your company’s trade secrets? (c) Do you think all wrongful taking of protected trade secrets should be a crime, punishable by criminal fines and prison? Or would civil (tort and/or contract) remedies provide enough protection? Explain your views.

Answer 1

A. A trade secret is any confidential information such as formula, process, technique or technology which helps the business get a competitive edge over the other competitors. And if leaked can harm the reputation or economic status of the company.

B. To protect and safeguard the trade secrets is vital to any business. To protect the trade secrets following steps should be followed:

I. Identifying the trade secret.

II. Storing the information in a secure place.

III. If stored in a computer or server, steps should be taken to prevent hacking or any calamity and backup should be maintained.

IV. Limiting access to the information, access should be provided to only trusted and high-level employees and not to outsiders or vendors in any case.

V. Should safeguard secret while engaging in business with other companies, nationally or internationally.

C. Businesses flourish because of their trade secrets and practices and if lost to theft or leak can incur a huge loss in the economic status of the company. So the trade secret should be considered under intellectual property and any harm to it should be punishable by fine or prison. Many countries have a strict rule against the theft of trade secrets, for example, America has Economic Espionage Act of 1996, which allows police to prosecute anyone who steals the trade secret.