A trade secret is information that is important to the business or company and is not known to the public. It is a term often used to cover information that has commercial value. A trade secret can include, for example, a method or technique that would give a business or company an edge over its competitors.
The law on the protection of confidential information protects ideas and information not in the public domain, including trade secrets. Thus, the law on trade secrets is really about the protection of confidential information.
Under the law, such information is protected as a secret from everyone except certain key individuals within the business or company. If someone reveals this secret information to others, especially if he is aware that it is a secret, legal action can be taken against him.
Protection of trade secrets
No registration procedures are involved for protection of a trade secret, and there is no specified time limit within which the secret may be protected. When a trade secret is leaked out, this breach of confidence is an action that may be taken in court, as this leak of the secret is unfair to the business/company, and may have harmful consequences.
However, not all information can be considered a trade secret. The court will consider the following when determining whether there has been a breach of confidence:
- The information was confidential to the business/company;
- The information has been revealed in breach of a promise of confidence; and/or
- The information was used in an improper way that has resulted in financial damage to the business/company.
How to protect trade secrets
The following are some useful pointers for protecting the confidentiality of information:
- Limit the number of people who can access such confidential information;
- Have employees sign contracts called non-disclosure agreements, which provide that they have to maintain confidential, specific information that is disclosed to them;
- Ensure that any individuals who come into contact with the business or company, such as consultants, vendors or anyone who has the opportunity to learn about confidential information sign non-disclosure agreements; and
- Keep a clear record of all business deals that may contain any confidential information.
The above are some common and non-exhaustive practices in businesses today aimed at protecting confidential information. Please seek professional advice on protecting your trade secrets and confidential information.
The relationship between patents and confidential information
As a general rule, it is not possible to maintain a patent and ensure non-disclosure of confidential information for the same invention. This is because, in return for obtaining a 20-year monopoly to exclude others from making, using or selling the invention, the owner of the invention will have to make a full disclosure of the invention during the patent application process.
The relationship between copyright and confidential information
Confidential information with copyrightable material will be protected by both copyright law and law regarding confidential information. For example, an individual who develops a computer software programme will be able to commercialise it but still keeping confidential the underlying architecture, algorithm and source code of the software programme.
Protection of confidential information outside Singapore
Protection of confidential information varies from country to country. In some countries, trade secrets are protected under separate laws. There are also laws in the EU and the US that govern data protection and privacy. However, the protection of trade secrets is a principle that is widely acknowledged under the World Trade Organization Trade-related Aspects of Intellectual Property Rights Agreement (Art. 39).