Trade Secrets

• Published date: 21 December 2021
• Subject Matter: Intellectual Property, Trade Secrets
• Law Firm: Haseltine Lake Kempner LLP
• Author: Mr Alex Rogers and Brian Whitehead

What is a Trade Secret?

Any commercially valuable information may be protected as a trade secret. Trade secrets are a little different from other types of intellectual property rights. There is no registration process and, by definition, no requirement to disclose the information to the public in exchange for protection. Instead, trade secret protection arises as a consequence of how the secret information is treated.

Protection for trade secrets in the UK is set out in the Trade Secrets (Enforcement etc.) Regulations 2018. Although these Regulations are derived from an EU directive, they remain in force post-Brexit. According to the Regulations, a "trade secret" means information which:

1. is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among, or readily accessible to, persons within the circles that normally deal with the kind of information in question;
2. has commercial value because it is secret; and
3. has been subject to reasonable steps under the circumstances by the person lawfully in control of the information, to keep it secret.

The Regulations state that the acquisition, use or disclosure of a trade secret is unlawful where the acquisition, use or disclosure constitutes a breach of confidence in confidential information.

From English case law, it has become widely accepted that in order to bring an action against another party for a breach of confidence relating to the use of information, three criteria must be satisfied. These are:

• The information was of a confidential nature. In other words it must not be something which is public property and public knowledge.
• The information was communicated in circumstances imparting an obligation of confidence.
• There was an unauthorised use of the information.

Each of these criteria should be considered very carefully by anyone hoping to benefit from trade secret protection in the UK.

Why keep a Trade Secret?

It can cover anything...

...that you can keep a secret. In contrast, legal restrictions are in place for what can be protected by patents, registered designs and copyright.

At the time of writing, one of the biggest talking-points in the intellectual property world is artificial intelligence (AI). While the UK and European Patent offices continue to discuss how AI inventions may be patented, it may be worth considering whether your AI invention could be effectively protected by keeping it as a trade secret. A trade...