Introduction
In SpongeBob Cartoon, the document in a bottle that Mr Krabs and SpongeBob always hides is the trade Secret of Krabby Patty restaurant. The secret ingredient is a manufacturing process which is confidential and valuable. It makes the restaurant unique as no one knows what it is except few.
Trade Secrets are Intellectual Property rights on confidential information which may be sold or licensed. For an information to be trade Secret, it must be commercially valuable and known to limited persons.
Intellectual property (IP) refers to intangible assets. Intellectual property is a legal term that refers to creations of the mind. Hence, intellectual property rights are the rights that protect these intangible assets, that is, assets that are creations of the mind and inventions generally. The intellectual property of a person includes intangible assets such as works of authorship, ideas, and business goodwill.
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.
Intellectual Property (IP) is categorized into the following:
1. Patents: This is a property right for an investor that's typically granted by a government agency such as the U.S. Patent and Trademark Office. The patent allows the inventor exclusive rights to the invention, which could be a design, process, improvement, or physical invention such as a machine.Exclusive rights granted for inventions, such as:functional innovations, ornamental designs, new plant varieties etc
2. Trademarks: This is a symbol, phrase, or insignia that's recognizable and represents a product that legally separates it from other products. A trademark is exclusively assigned to a company. It owns the trademark so no others may use or copy it. A trademark is often associated with a company's brand. It is a distinctive signs identifying a business or product, including: brand names, symbols or icons etc
3. Copyrights: It provides authors and creators of original material the exclusive right to use, copy, or duplicate their material. Authors of books have their works copyrighted as do musical artists. A copyright also states that the original creators can grant anyone authorization through a licensing agreement to use the work. It has the exclusive rights for original literary, dramatic, musical, and artistic works, such as: books, articles, software code, music, paintings, sculptures, photographs, movies and videos.
4. Trade Secrets: This is a company's process or practice that isn't public information and provides an economic benefit or advantage to the company or holder of the trade secret. It is confidential and valuable information, which includes:business methods, recipes, software algorithms, manufacturing process, design, pattern, recipe, formula, or proprietary process.
5. Digital Assets
Digital assets are also increasingly recognized as intellectual property. These would include proprietary software code or algorithms and online digital content
6. Franchises
A franchise is a license purchased by a company, individual, or a party called the franchisee. It allows them to use the franchisor's name, trademark, proprietary knowledge, and processes.
Trade Secret
The United States Patent and Trademark Office refers to a trade secret as a type of intellectual property. This definition of trade secret is in reference to the business ownership of a formula, pattern, compilation, program, device, method, technique, or process that provides a competitive edge.
Trade secrets can be any confidential business information which provides an organization with a competitive edge. They are often used when an invention is not eligible for a patent or if the inventor does not wish to disclose the ‘secret’ publicly, which a patent requires you to do.
By their nature trade secrets have a commercial value because they are secret from competitors, or would-be competitors. There must be active steps taken by the holder of a trade secret to keep the information secret.
Trade secrets must be actively protected by the company and are typically the result of a company's research and development (R&D).
Consequences Of Leaking Trade Secret
1. Loss of competitive advantage: The leaked trade secret can be used by competitors, reducing the company's market advantage.
2. Financial losses: The company may lose revenue, profits, or market share due to the leaked information.
3. Damage to reputation: A trade secret leak can damage the company's reputation and erode customer trust.
4. Loss of intellectual property value: The leaked trade secret may become public knowledge, reducing its value and potential for future intellectual property protection.
5. Employee morale and trust issues: Leaks can create tension and mistrust among employees, potentially leading to turnover or decreased productivity.
How To Protect Trade Secret
1. Non-Disclosure Agreements (NDAs): Require employees, partners, and contractors to sign NDAs to ensure they understand the confidentiality of trade secrets.
2. Access Controls: Limit access to sensitive information to authorized personnel only, using tools like passwords, encryption, and secure storage.
3. Physical Security: Secure physical areas where trade secrets are stored, such as locked rooms or safes.
4. Digital Security: Use encryption, firewalls, and secure networks to protect digital trade secrets.
5. Training and Education: Educate employees on trade secret protection, their roles in maintaining confidentiality, and the consequences of leaks.
6. Document Management: Label and track sensitive documents, and implement secure disposal methods.
7. Visitor Management: Control visitor access to sensitive areas and ensure they sign NDAs if necessary.
8. Exit Strategies: Ensure departing employees return all confidential materials and sign agreements to maintain confidentiality.
9. Monitoring and Auditing: Regularly monitor and audit access to trade secrets to detect potential leaks.
10. Incident Response Plan: Establish a plan to respond quickly and effectively in case of a trade secret leak.
11. Limit Disclosure: Only share trade secrets on a need-to-know basis, and use secure communication channels.
12. Use of Technology: Utilize technology like data loss prevention (DLP) tools and intrusion detection systems to protect trade secrets.
Conclusion
Trade secrets are used to create a business model that differentiates the company's offerings to its customers by providing a competitive advantage.
A trade secret can be any business information that derives its value from its secrecy. It can be a method, a technique, a process, research and analysis data, a formula, a recipe, a device, an instrument, etc.
Trade secret is any practice or process of a company that is generally not known outside of the company. Information considered a trade secret gives the company a competitive advantage over its competitors and is often a product of internal research and development.This is the heart of a business.
References:
- World Intellectual Property Organization (WIPO)
- United States Patent and Trademark Office (USPTO)
- International Trademark Association (INTA)
- Copyright Information Center (CIC)
-Investopedia
