27 May 2010
Trade secrets are unpublished technical information such as formulae, recipes, source code and test results the use or disclosure of which would benefit a competitor or harm the person who created or gathered the information. So long as they remain secret, or at least not generally known, trade secrets are protected by the law of confidence.
Relying on the law of confidence is thus the opposite of patenting. Businesses with products that cannot easily be reverse engineered such as Chartreuse and Coca Cola can prevent competitors from marketing identical products indefinitely simply by keeping their recipes or manufacturing processes secret. However, information ceases to be protected by the law of confidence once it becomes known otherwise than through a breach of confidence. A patent or some other form of intellectual property protection is required where a design or manufacturing process is likely to be developed independently by a competitor or where it can be deduced by dismantling the product that is marketed to the public.
Owners of new inventions rely on the law of confidence if they have to reveal aspects of their invention to such persons as consultants, contractors and prospective licensees and investors before they apply for patent protection. Businesses also rely on the law of confidence in rapidly advancing technologies or changing markets where the advantage of a patent monopoly is more than offset by cost of applying for and maintaining the grant.