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How Does Intellectual Property Differ From Trade Secrets in the UK?

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If you run a business in the UK, you may be seeking clarity on the different types of intellectual property and how these differ from trade secrets in your industry. In this article, we will discuss the different types of protection each offer and how they impact your business.

What is Intellectual Property?

Intellectual Property is a creation of the mind and is generally an intangible type of property. There are many types of intellectual property, including:

  • literary, dramatic, and other creative works;
  • inventions;
  • designs; and
  • compositions.

This is a non-exhaustive list, and many more creations can be a form of intellectual property. Intellectual property rights are the rights you receive when you create these different pieces of work. For example, you typically receive exclusivity rights in relation to your creation for a particular period of time.

Intellectual property rights can take many forms, and each form is made for specific types of property. IP rights include copyright, trade marks, patents, and design rights.

What are Trade Secrets?

Trade secrets are recognised as a type of intellectual property in the UK. A trade secret is an intangible process, practice, formula or piece of information that is valuable confidential business information intended to remain confidential. Trade secrets generally would allow another business to obtain a competitive advantage over your business if made public.

An example of a trade secret would be a recipe for the most popular cake a bakery sells. The information can take any form but will be not known to the public and will have a commercial benefit because of this.

In contrast to other intellectual property rights, such as trade marks and patents, trade secrets are not registered with the Intellectual Property Office. The process for protecting a trade secret is an internalized process within businesses, and your business would often use non-disclosure agreements or confidentiality agreements as protection mechanisms.

Unlike other forms of intellectual property, trade secrets remain confidential. Indeed, patents, trade marks, design rights and copyright are all publicly available. Patents remain confidential until they are granted, however, trade secrets retain economic value by virtue of their protection and secrecy. Therefore, they provide your business with a competitive edge.

In order to qualify as a trade secret, the information must be:

  • commercially valuable due to its secretive nature;
  • only known by a restricted group of individuals; and
  • subject to reasonable steps to keep the trade secret confidential (such as by using different types of legal agreements within the business).
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Impact of Infringement of Trade Secrets

A person or business will infringe on a trade secret by unlawful acquisition, use or disclosure.

Trade secrets, as confidential business information, can be highly valuable assets for firms in England and Wales. Importantly, infringement can be difficult to monitor. Infringement can take the form of a breach of contract or any other disclosure that was negligent or intentional. If the information was obtained legitimately, it cannot be deemed an infringement.

Selling and Licensing

Despite the fact trade secrets must remain confidential, they are still a form of intellectual property, and you can assign or license them to others. If you are the holder of a trade secret, you have the right to consent to another person accessing or using your trade secret. If you choose to do this, there will be no infringement as there has been a consensual agreement to pass the trade secret information across to another person. However, you might request the other party to sign a further confidentiality agreement or contract to maintain the confidentiality of the trade secret. The licensee will also usually be required to take reasonable steps to maintain the secrecy of the trade secret, again, to protect its competitive advantage and absence from public knowledge.

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Key Takeaways

Trade secrets are recognised as a type of intellectual property in the UK and involve confidential information. They take the form of a process or practice, such as a recipe for a type of food or drink. Crucially, a trade secret is confidential and provides the holder with a competitive advantage. Those who are aware of trade secrets generally have to sign some form of contract or non-disclosure agreement in order to impose a formal prohibition on spreading the information. Trade secrets are not registered with the Intellectual Property Office, unlike many other forms of intellectual property, such as trade marks and patents. The most important characteristic of a trade secret is the fact it is not public knowledge.

For more information about protecting your business, our experienced intellectual property lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions

What is a trade secret?

A trade secret is a type of intellectual property. It is a confidential piece of information that provides a competitive advantage to the owner.

What is the difference between a trade secret and a patent?

Both a trade secret and patent must be confidential at some point. However, a patent will eventually be made public as it becomes commercially available. A trade secret is continuously confidential.

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Fiona Prior

Fiona Prior

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