Competitive advantage and confidentiality are closely linked. What helps you stand out from the crowd or what makes you novel may be able to be protected with intellectual property rights but, in many cases, this depends on confidentiality being maintained before a formal registration or even throughout the lifecycle of the product.

Before sharing any aspect of your idea with investors, or at trade fairs for example, it is important to decide if you may be interested in protecting your intellectual property rights and, if so, which type of intellectual property rights. Some IP rights, such as patents and designs, lean on confidentiality for a successful application (novelty is one of the main conditions for obtain patent for an invention or to register a design). Other IP assets, such as trade marks, for example, can be freely used before they are officially registered. However, keep in mind that, while you are still trying to register your IP, somebody else may try to register your logo or product name as their own. This could mean you would not be able to use it anymore. This is particularly relevant for those businesses operating in highly competitive sectors or on an international scale. For this reason, it is safer to register your brand shortly after it is created and before its use commence.

Non-disclosure agreements

Non-disclosure agreements (NDAs) can offer a safe means to share information you would like to remain confidential, even before registration. NDAs oblige the party you are disclosing information to keep it secret for a set period of time. Important aspects to cover in an NDA include:

• the precise scope of information that should be kept secret;
• the terms of the NDA;
• the obligations of the parties, including the technical and organisational protection measures the receiving party should take;
• the potential exclusions (e.g. disclosure request from public authorities);
• the consequences of a breach of the NDA.

Legal representatives can support you in preparing an NDA. A template is available through the Intellectual Property Helpdesk.

Trade secrets

Having a trade secret can bring great benefits to its owners, offering exclusivity and monopoly for a potentially unlimited period of time. Trade secrets aren’t registered at any intellectual property office, but they can be sold or licensed to a third party.

Any information that meets the following conditions can be considered a trade secret:

• it is not generally known;
• it has been subject to reasonable steps to keep it secret; and
• it has commercial value because it is secret.

Examples of business information that can constituted and be protected as trade secret: technical information (e.g., recipes for food and beverages, manufacturing processes and methods, software source code; business information (e.g. marketing strategies, consumers lists and contact information, supplier and distributors details, pricing and cost information); research and development data, laboratory notebooks; Financial information (e.g. investment strategies, profit margins and costs structure); Economic information (e.g. business models and plans). 

Taking appropriate measures to keep your business information a secret is essential for it to be considered a trade secret. Below are a few examples of measures you can implement to help maintain the secrecy of your trade secret:

• non-disclosure agreements (confidentiality agreements);
• non-compete clauses;
• storing trade secrets in a system with restricted access (e.g. password protected) or in a safe;
• IT security measures;
• information classification system (stamp certain documents as confidential).

Non-disclosure, confidentiality or non-compete clauses should be signed with employees, potential partners, investors, providers/suppliers and even distributors, depending on your circumstances. You may also wish to take a look at i-DEPOT, developed by the Benelux Office for Intellectual Property to store ideas and information. It is confidential by default and can serve as legal proof with a date stamp.

Useful link:

• Discover Guide Trade secrets: what they are and how to make the most of them

Discovery of trade secrets

There are means by which trade secrets can be discovered, both lawfully and unlawfully. If independently discovered or created (for example the observation, study, disassembly or testing of a product that has been made available to the public), there is little you can do. You may lose the market exclusivity you enjoyed through your trade secret. The party who has lawfully acquired the information will be able to use it. Moreover, they could even register the intellectual property involved (e.g. obtain a patent for an invention), giving them market exclusivity and leaving you unable to use it. If you think your trade secret can be easily reverse engineered, you may wish to consider IP rights such as patents (should your trade secret be suitable for patent protection).

If acquired unlawfully, there are measures you can take, such as stopping the unlawful use and further disclosure, taking the product off the market and requesting financial compensation for damages. Enforcement measures vary based on national law.

The document enclosed in the useful links section will offer you an insight into the enforcement options available in the EU countries: Baseline of trade secrets litigation in the EU Member States.