Are Trade Secrets the Right Choice for Your Company? – Klinck LLC

Are Trade Secrets the Right Choice for Your Company?

Trade secret law is the least understood – and most underused – form of intellectual property. There are many advantages to using trade secret law to protect your company’s intellectual property. In some cases, small businesses and innovators have to decide whether to use a patent or trade secret. There are advantages to each.

What Is A Trade Secret

Trade secret law protects valuable ideas, concepts, or processes that have not been made public and that you have taken reasonable steps to keep confidential. Some classic examples are business processes, formulas for products, and customer lists. The formula for Coca-Cola, for example, is protected as a trade secrete by the company.

The key attributes to a trade secret are that the information has commercial value, has not been made public, and is subject to reasonable efforts to ensure its continued confidentiality. The level of protection that you must employ to ensure that your trade secrete retains its status will depend on the value of the information and the available means for protecting it.

Using the Coca-Cola recipe as an example, the entire recipe is known only to a handful of employees and the written copy is kept in a bank vault. The typical trade secret will not require that level of protection, but you need to take reasonable steps to ensure that the information retains confidential. Common steps would include limiting access to the information to those who need to know it within your business and having non-disclosure agreements in place for the employees who do have access to it. If you need support with growing your business with your fantastic products FastSpring ( provide some great digital business growth tools for any business.

The Advantages Of Trade Secrets

Trade secrets have a number of advantages over other forms of intellectual property. Some of the advantages of a trade secret may include:

  • Trade secrets are inexpensive to obtain because they don’t require a registration process or fee.
  • Trade secret retain their protection forever so long as the secret is not revealed publicly.
  • Trade secrets have an instant effect, as there are no wait times for their protection to be enforced.
  • Trade secrets do not have to comply with any required governmental authority or disclosures as in other intellectual property.
  • Trade secrets can protect “abstract idea,” including software designs, codes, and algorithms.

The Disadvantages Of Trade Secrets

While there are many advantages and benefits to trade secrets, there are also drawbacks to using trade secret law to protect your ideas. These disadvantages include:

  • If a trade secret is made public through your company’s actions or through a failure to take reasonable steps to protect it, it loses protection.
  • If a product or process can be reverse-engineered, it is won’t remain a trade secret for long.
  • If a competitor develops the process that you are retaining as a trade secret on its own (e., without input from someone who knows your trade secret), it is free to use the process.
  • Trade secrets can be difficult to enforce compared to other protections, because you will need to demonstrate that the person using the information obtained it unlawfully from someone with access to your trade secret.


Deciding whether to use trade secret law to protect your intellectual property can be a difficult task and an intellectual property attorney can help you weight the pros and cons of trade secrets.

Your IP attorney can create an intellectual property management strategy that can protect your trade secrets and enforce your IP rights.

About the Author

I’m a lawyer and entrepreneur based in Washington, DC. My legal practice focuses on helping innovators, entrepreneurs, and startups navigate intellectual property issues. My books about IP Law are available for sale on Amazon.

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