Trade secrets and IP: Protection strategies

By Darliss Gordon, Consortium Legal.

In an increasingly globalized and competitive world, companies face the challenge of protecting key information that can make the difference between success and failure. Trade secrets and intellectual property are essential elements in this equation. Although both concepts are related to the safeguarding of intangible assets, they have fundamental differences and complement each other in protection strategies.

Trade secrets refer to any information, whether technical, commercial or strategic, that has economic value due to its confidential nature. To be considered a trade secret, this information must meet three main criteria:

1. 1. That is not generally known or easily accessible by those in the circles that normally handle the respective information, either as a whole or in the precise configuration and assembly of its components.
   2. That it has been the subject of reasonable measures taken by its legitimate holder to keep it secret.
   3. That an unauthorized disclosure could give a competitive advantage to third parties. Examples of trade secrets include chemical formulas, manufacturing processes, marketing strategies, and customer lists.

Intellectual property, meanwhile, covers a range of legal rights that protect creations of human intellect, such as patents, trademarks, copyrights and industrial designs. Although trade secrets are not subject to registration like other intellectual property rights, they both share the objective of protecting valuable intangible assets.

The main difference lies in the method of protection. While intellectual property rights usually require registration with an authority to be legally recognized, trade secrets depend on their confidentiality, however, both can coexist.

In view of the above, even though trade secrets, in general, are not subject to registration with state authorities, it is important that companies manage and implement strategies with a comprehensive approach. These are some of the strategies that can combine legal, technical and administrative measures:

1. Non-disclosure agreements (NDAs): NDAs are essential legal tools for protecting trade secrets. These agreements establish legal obligations for employees, suppliers and business partners not to disclose confidential information. Some key points to include in an NDA:

• • • A clear definition of what constitutes confidential information.
    • The duration of the confidentiality obligation.
    • Penalties in case of non-compliance.

2. Non-competition clauses: These can be included in employment contracts to limit the activities of employees after they leave the company. These clauses must be reasonable in terms of time and geographical area to be legally valid.
3. Internal audits and information classification: Conducting regular audits to identify and classify sensitive information allows companies to prioritize resources to protect the most valuable assets. Classification can be divided into levels, such as “public,” “internal,” and “confidential.”
4. Training and awareness-raising for staff: Staff must be trained to understand the importance of trade secrets and the company’s protection policies. Regular training sessions can reduce risks associated with negligence or ignorance.
5. Implementation of technical measures: Cybersecurity has become one of the most relevant approaches to this issue. With the increase in digitization, companies face threats of cyberattacks that can compromise their trade secrets. Protection of technological infrastructure is crucial, including the use of advanced technologies such as access management systems, data encryption and network monitoring, to protect trade secrets against accidental or intentional leaks.
6. Legal action in case of violation: In case of infringement, companies must be prepared to act quickly through available legal actions with the purpose and effect of compensating for the damage caused and demanding the interruption of the improper use of the information.

In short, the protection of trade secrets is a critical component in safeguarding a company’s competitive advantage. Its correlation with intellectual property highlights the importance of integrating legal and technical strategies for the management of intangible assets. Through a combination of legal agreements, staff training and technological measures, companies can minimize risks and guarantee the confidentiality of their most valuable information.