Page 56 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Unit 4: Legal Issues for Entrepreneur

According to Chambers 21st Century Dictionary, (Reprint on 2000, page 1491) the term Trade Notes
Secret means – an ingredient, technique, etc. that a particular company or individual will not
divulge because they see it as giving them an advantage over their rivals.
Figure 4.3: Symbol Depicting Secret Content

Source: http://polymerinnovationblog.com/wp-content/uploads/2011/12/Trade-Secret.jpg
Again, according to Oxford advanced learners Dictionary the term Trade Secret means a piece of
information about how a particular product is made, that is only known to the company that
makes it.
Any confidential business information which provides an enterprise a competitive edge may be
considered a trade secret. So, a trade Secret is a formula, practice, process, design, instrument,
pattern, or compilation of information used by a business to obtain an advantage over competitors
or customers. Sometimes these trade secrets are also known as ”confidential information.”
A trade Secret is any formula, pattern, physical device, idea, process, compilation of information
or other information that:
provides the owner of the information with a competitive advantage in the market place.
is treated in a way that can reasonably be expected to prevent the public or competitors
from learning about it, except through improper acquisition or theft.
Unlike other forms of intellectual property, trade secrets are essentially internal instruments.
The responsibility for their protection is in the hands of the owner of the trade secret. They are
kept confidential.

Example: Most famous example of trade secret is the coca-cola formula. This formula is
kept locked in a bank vault in Atlanta, can be opened only by a resolution of the company’s
board and is known to only two employees at the same time. The public has no access to the
name of those employees and they are not allowed to fly on the same air plane.

Trade Secret is confidential information not generally known to others. The information must
derive independent economic value, actual or potential. The secret must give the holder a
competitive edge. However, the English Law does not distinguish between various types of
confidential information. But, generally, Trade Secrets, relate to different types of information.
Some of these are given below:

Technical and Scientific information
Commercial information
Financial information and

Negative information

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