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What is a Trade Secret?

Think about everything that goes into running a business. What are the tasks that have to be accomplished each day? How do they get done? What is the distribution of labor? Does the business market itself? Who do they market to and how so? Now, what do we call all of this? On the surface, we can call it all operations of the business and move on. However, if we want to think more intelligently about our business then we should call them all Trade Secrets. But what exactly is a trade secret and what goes into classifying something as such?

Simply put, a trade secret can be anything. Employee manuals, job descriptions, process, procedures, market practices encompassing protocols such as who to market to and importantly, who NOT to market to, patents, infrastructure and so on.

Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. [1]  As long as a piece of information is made up the following two aspects, then it can and should be classified as a trade secret:

  1. It has economic value to the company
  2. You (as an owner or manager) take reasonable steps to protect that information

Trade secrets are what makes up how a business or organization operates. They are important because they provide the structure to the organization as well as have an influence on the value of the business as a whole by being a component of it’s Intellectual Property.

 

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