Trade secrets are a form of intellectual property that can include a broad range of information that provides the owner with a competitive edge. Anything from formulas, designs and customer lists can be considered to be a trade secret. Most forms of intellectual property start out as trade secrets and in the beginning it is important to establish if the idea is best to be protected as a trade secret or as another form of intellectual property. Trade secrets are only able to be protected if they remain confidential. In order to determine if something is a trade secret, the courts look at a variety of factors which include: the value of the trade secret to the owner and to the industry, steps taken by the owner in order to protect the secret, time and effort it took to develop the secret, industry norms, the extent to which the information is known outside of the industry and the dispersal of the information among the employer’s employees and business.

Trade secrets are valuable but are not as protected as patents and other forms of intellectual property as there is no Trade Secrets Act. Unlike patents and trademarks, there is no statutory basis for trade secrets. If the owner of the trade secrete decides to bring an action for breach of contract or breach of confidence, they must solely rely on common law. Furthermore, trade secrets are not protected if an individual develops a similar secret or if the secret if obtained through reverse engineering.

The Supreme Court of Canada has laid out three requirements to show a breach of confidence: the information must have the necessary quality of confidence, the information must have been disclosed in circumstances where there is an obligation of confidence and the unauthorized use of the information to the detriment of the party communicating it. Any action for the misuse of a trade secret should be brought immediately as any form of delay can be detrimental. The remedies for the misuse of a trade secret can include interlocutory and permanent injunctions, damages or an accounting of profits, plus costs.

There are numerous ways for trade secrets to remain secret. This includes the implementation of non-disclosure or confidentiality agreements, confidentiality clauses in employment agreements, encryption of valuable information, password protection and lock and key in order to lock up important information.

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