How Does Your Business Protect its Confidential Information?

If your business has trade secrets, read on for 5 tips on how to protect your valuable commercial information.

What is a Trade Secret, and does your Business have them?

The law on Trade Secrets in Europe recently changed. The new law now formally defines a trade secret as being information with commercial value that is actively kept secret.

The scope of information with commercial value is very wide - this could extend to your client base, your prospects and information contained in your CRM, as well as your internal pay grades and promotion strategies and business expansion plans right through to the research and development which is being carried out in respect of your new products and services.

Trade Secrets law protects business interests.

The new law, which applies EU-wide once it has been implemented by all member states now grants specific protection on a business’ secret, commercially valuable information against unlawful use and disclosure.

Indeed, the new law on Trade Secrets now sets out what lawful acquisition and use of trade secrets is, as well as unlawful use. In a nutshell, lawful uses are “honest commercial practices” such as independent discovery and disassembly and unlawful use is any conduct contrary to this honest practice. 

Photo by  G. Crescoli  on  Unsplash

Photo by G. Crescoli on Unsplash

To use or disclose a trade secret without consent is unlawful, unless an exception applies such as whistleblowing. Under the new law, protection and remedies are now available to business across the EU Member States. This is particularly important for business conducting cross-border business within the European Union.

Despite how important trade secrets are, prior to the new law, the level of protection afforded to them in different EU jurisdictions varied a lot, and so businesses carrying out their activities across Europe could never be sure as to how their confidential trade secrets would be protected. 

The new law therefore gives businesses better legal certainty as to the protection of the Trade Secrets, but failure to respect the law will mean much harsher sanctions.

What do businesses need to do?

Under the new law, businesses need to be capable of explaining what information is a trade secret and why, and need to be able to evidence clear and reasonable steps that have been taken to keep information secret. 

How does this work in practice? Here are few tips and tricks to get you started.

1) Ensure your staff’s employment contracts contain appropriate confidentiality obligations which are appropriate to the tasks they are carrying out.

2) Make sure that all of your business partners sign up to a non-disclosure agreement covering your trade secrets and confidential information before you share anything with them.

3) Implement information management processes by limiting the information shared around the company. For example, marketing departments might not need to know recipes, payroll departments might not need to know packaging designs, and classified information should be separated physically and electronically - consider marking sensitive documents as confidential.

4) Carry out staff training to ensure that your whole business is aware of what a trade secret is, and what they need to do when they are handling them on behalf of your company.

5) Review your IT and cyber-security practices to ensure that confidential information is securely stored, by encryption and/or password protection, and to verify that your systems are robust to prevent against unauthorised access.

If you need any advice about how to manage Trade Secrets within your company, please feel free to contact us!


Lily Morrison, Legal Consultant at Gerrish Legal, September 2018

Charlotte Gerrish, Founding Lawyer at Gerrish Legal, September 2018