"Trade secret is a formula, process, device or other business information that is kept confidential to maintain an advantage over the competitors. It is the information which includes formula, pattern, compilation, programme, device, method, technique, or process, that derives independent economic value from not being generally known or readily ascertainable. North American Free Trade Agreement (NAFTA) defines a trade secret as “information having commercial value, which is not in the public domain, and for which reasonable steps have been taken to maintain its secrecy.”
The Uniform Trades Secrets Act, 1970 also provides for the definition of trade secrets, which is as follows:-“Information, including a formula, pattern, compilation, program device, method, technique, or process, that:
(i) derives independent economic value, actual or potential, from no being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy”.
Compared to patents, the advantages of trade secrets are that a trade secret:
- Is not limited in time, but continues indefinitely as long as the secret is not revealed to the public, whereas a patent is only in force for a specified time, after which others may freely copy the invention.
- Does not require any registration costs or compliance with any formalities.
- Has an immediate effect.
- Does not imply any disclosure of the invention to the public.
- Protection of information such as ideas or information which does not qualify to be protected as intellectual property within the legal framework. Intellectual Property Laws of the land can be protected by trade secrets.